Suresh draws a bill for 15,000 on Anup on 15th April, 2020 for 3 months, which Anup returns to Suresh after accepting the same. Suresh gets it dis-...

Question

Suresh draws a bill for 15,000 on Anup on 15th April, 2020 for 3 months, which Anup returns to Suresh after accepting the same. Suresh gets it dis- counted with the bank for 14,700 on 18th April, 2020 and remits one-third amount to Anup. On the due date Suresh fails to remit the amount due to Anup, but he accepts a bill of 17,500 for 3 months, which Anup discounts for 17,100 and remits 2,825 to Suresh. Before the maturity of the renewed bill Suresh becomes insolvent and only 50% was realized from his estate on 31st October, 2020. Pass necessary Journal entries for the above transactions in the books of Suresh. [Nov. 2020, 10 Marks]; [MTP Jan. 2025; Modified Figures-3X]

Accepted Answer

Answer Solution: In the books of Suresh Journal Entries Date Particulars Amount Amount 2020 15 April Bills receivable A/ c Dr. To Anup's A/ c (Being accommodation bill drawn on Anup of 15,000) 15,000 - - 15,000 18 April Bank A/c Dr. Discounting Charges A/ c Dr. To Bills Receivable A/ c (Being bill discounted with bank) 14,700 300 - - - 15,000 Anup's A/c Dr. To Bank A/c To Discounting Charges A/ c (Being 1 /3rd amount remitted to him) 5,000 - - - 4,900 100 18 July Anup's A/c Dr. To Bills payable A/ c (Being bill accepted in favour of Anup for 3 Months) 17,500 - - 17,500 Bank A/c Dr. Discounting Charges A/ c (1) Dr. To Anup’s A/c (Being amount received with discount charges from Anup) 2,825 300 - - 3,125 21 Oct Bills payable A/ c Dr. To Anup's A/ c (Being bills payable accepted earlier, now dishonoured) 17,500 - - 17,500 31 Oct Anup's A/c (WN 2) Dr. To Bank A/c To Deficiency A/ c (Being amount paid as full and final settlement) 13,125 - - - 6,562.50 6,562.50 Working Note: 1. Share of Suresh in discounting charges of Second Bill = 400 x [1000 + 2825 / 17,100] = 300 2. Anup's A/c Date Particulars Amt Date Particulars Amt 18Apr 18 July 31 Oct To Bank A/c To Discounting Charges To Bills Payable A/ c To Bank A/c To Deficiency A/ c 4900 100 17,500 6562.50 6562.50 15 Apr 18 July 21 Oct By Bills Receivable A/ c By Bank A/c By Discounting charges By Bills Payable A/ c 15000 2825 300 17000 35,625 35,625

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