Journalise the following transactions in the books of Karthik: (i) Karthik accepted a bill to Balu for 3,500 discharged by a cash payment of 1,500 ...

Question

Journalise the following transactions in the books of Karthik: (i) Karthik accepted a bill to Balu for 3,500 discharged by a cash payment of 1,500 and a new bill for the balance plus 75 for interest. (ii) Gopal acceptance for 4,500 which was endorsed by Karthik to Mohan was dishonoured. Mohan paid 50 as noting charges. Bill was withdrawn against cheque. (iii) Doshi retires a bill for ₹ 2,500 drawn on him by Karthik for ₹ 25 discount. (iv) Karthik's acceptance to Prem for ₹ 6,500 discharged by Prem. Ashok's acceptance to Karthik for a similar amount. [June 2023, 5 Marks]

Accepted Answer

Option : Correct Option. Solution: In the books of Karthik Journal Entries | Date / No. | Particulars | L.F. | Debit (₹) | Credit (₹) | | :--- | :--- | :---: | ---: | ---: | | (i) | Bills Payable A/c
To Balu A/c
(Being old bills payable dishonoured) | | 3,500 |
3,500 | | | Balu A/c
To Cash A/c
(Being part payment made) | | 1,500 |
1,500 | | | Interest A/c
To Balu A/c
(Being interest due to him) | | 75 |
75 | | | Balu A/c
To Bills Payable A/c
(Being new bill accepted to him) | | 2,075 |
2,075 | | (ii) | Gopal A/c
To Mohan A/c
(Being Gopal's acceptance endorsed to Mohan earlier, now dishonoured) | | 4,550 |
4,550 | | | Mohan A/c
To Bank A/c
(Being payment made to Mohan) | | 4,550 |
4,550 | | (iii) | Cash A/c
Discount A/c
To B/R A/c
(Being payment received from Doshi, allowed him discount) | | 2,475
25 |

2,500 | | (iv) | Bills Payable A/c
To Bills Receivable A/c
(Being bills payable from Ashok endorsed to Prem, in settlement of bills payable issued to him earlier) | | 6,500 |
6,500 |

Options

Correct Answer

All Options:

Detailed Solution & Explanation

Key Concepts to Understand

Promissory Note

More Questions from Bills of Exchange and Promissory Notes

Ready to Master Bills of Exchange and Promissory Notes?