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acceptance of Satish for Rs7200 was renewed for 3 months interest charged@5 percent.We received the acceptance of new bill along with interest .jounalize this in both account
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acceptance of Satish for Rs7200 was renewed for 3 months interest char...
Journal Entry for Renewal of Acceptance with Interest
There are two accounts that are affected by the renewal of acceptance with interest: Acceptance Account and Interest Account. The journal entry for this transaction is as follows:
Debit: Acceptance Account - Rs. 7,200
Credit: Acceptance Account - Rs. 7,200
Credit: Interest Account - Rs. 90 (Rs. 7,200 x 5% x 3/12)
Explanation:
Renewal of Acceptance: Satish has renewed his acceptance for Rs. 7,200 for a period of 3 months. This means that he has promised to pay the amount after 3 months.
Interest Charged: Since Satish has delayed the payment, interest is charged on the acceptance amount at the rate of 5% for 3 months.
Debit Acceptance Account: The acceptance account is debited to show that Satish has promised to pay the amount.
Credit Acceptance Account: The acceptance account is credited to show that the acceptance has been renewed.
Credit Interest Account: The interest account is credited to show that interest has been charged on the acceptance amount.
Overall, this journal entry records the renewal of Satish's acceptance along with the interest charged on it.
There are two accounts that are affected by the renewal of acceptance with interest: Acceptance Account and Interest Account. The journal entry for this transaction is as follows:
Debit: Acceptance Account - Rs. 7,200
Credit: Acceptance Account - Rs. 7,200
Credit: Interest Account - Rs. 90 (Rs. 7,200 x 5% x 3/12)
Explanation:
Renewal of Acceptance: Satish has renewed his acceptance for Rs. 7,200 for a period of 3 months. This means that he has promised to pay the amount after 3 months.
Interest Charged: Since Satish has delayed the payment, interest is charged on the acceptance amount at the rate of 5% for 3 months.
Debit Acceptance Account: The acceptance account is debited to show that Satish has promised to pay the amount.
Credit Acceptance Account: The acceptance account is credited to show that the acceptance has been renewed.
Credit Interest Account: The interest account is credited to show that interest has been charged on the acceptance amount.
Overall, this journal entry records the renewal of Satish's acceptance along with the interest charged on it.
Community Answer
acceptance of Satish for Rs7200 was renewed for 3 months interest char...
In the books of Satish (Drawee)
1.Interest a/c ___Dr 360
To drawer a/c 360
(Being interest charged at 5 % )
2.Drawer a/c _____Dr 7560
To B/P a/c 7560
( Being bill is accepted with intrest)
In the books of Drawer
1. Satish a/c____Dr 360
To interest a/c 360
(Being interest charged at 5%)
2.B/R a/c _____ Dr 7560
To Drawee a/c 7560
( Being bill is drawn with interest )
1.Interest a/c ___Dr 360
To drawer a/c 360
(Being interest charged at 5 % )
2.Drawer a/c _____Dr 7560
To B/P a/c 7560
( Being bill is accepted with intrest)
In the books of Drawer
1. Satish a/c____Dr 360
To interest a/c 360
(Being interest charged at 5%)
2.B/R a/c _____ Dr 7560
To Drawee a/c 7560
( Being bill is drawn with interest )
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acceptance of Satish for Rs7200 was renewed for 3 months interest charged@5 percent.We received the acceptance of new bill along with interest .jounalize this in both account
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