on 1st January 2018 Ram drew a bill for rs 5000 for 4 month on Basant ...
**Journal Entries in the Books of Ram:**
1. **On 1st January 2018:**
- Debit: Basant (Sundry Debtor) Account - Rs 5000
- Credit: Bills Receivable Account - Rs 5000
Explanation: Ram drew a bill on Basant for Rs 5000, which is recorded as a debit entry in Basant's account and a credit entry in Bills Receivable account.
2. **On 4th January 2018:**
- Debit: Bills Receivable Account - Rs 5000
- Credit: Basant (Sundry Debtor) Account - Rs 5000
Explanation: Basant accepted the bill drawn by Ram, which is recorded as a debit entry in Bills Receivable account and a credit entry in Basant's account.
3. **On the Due Date (Dishonour of Bill):**
- Debit: Basant (Sundry Debtor) Account - Rs 5000
- Credit: Bills Receivable Account - Rs 5000
Explanation: Since Basant is unable to meet the bill on the due date, the bill is dishonored. The amount is reversed by debiting Basant's account and crediting Bills Receivable account.
4. **On the Due Date (Dishonour Charges):**
- Debit: Basant (Sundry Debtor) Account - Dishonour Charges
- Credit: Ram's Account - Dishonour Charges
Explanation: Dishonour charges incurred by Ram due to the dishonour of the bill by Basant are recorded as a debit entry in Basant's account and a credit entry in Ram's account.
5. **On the Due Date (Discount Allowed):**
- Debit: Discount Account - Rs (Discount Amount)
- Credit: Bills Receivable Account - Rs (Discount Amount)
Explanation: Ram discounts the bill with his banker at 6% per annum. The discount allowed is recorded as a debit entry in Discount account and a credit entry in Bills Receivable account.
**Journal Entries in the Books of Basant:**
1. **On 1st January 2018:**
- Debit: Bills Payable Account - Rs 5000
- Credit: Ram (Sundry Creditor) Account - Rs 5000
Explanation: Basant accepts the bill drawn by Ram, which is recorded as a debit entry in Bills Payable account and a credit entry in Ram's account.
2. **On 4th January 2018:**
- Debit: Ram (Sundry Creditor) Account - Rs 5000
- Credit: Bills Payable Account - Rs 5000
Explanation: The acceptance of the bill by Basant is recorded as a debit entry in Ram's account and a credit entry in Bills Payable account.
3. **On the Due Date (Dishonour of Bill):**
- Debit: Ram (Sundry Creditor) Account - Rs 5000
- Credit: Bills Payable Account - Rs 5000
Explanation: The dishonour of the bill by Basant is recorded as a debit entry in Ram's account and a credit entry in Bills Payable account.
4. **On the Due Date (Dishon
on 1st January 2018 Ram drew a bill for rs 5000 for 4 month on Basant ...
In the books of Ram ......
1st Jan. (1) B/R Dr. To Basant. .... ... (2)Bank A/c Dr. .... discount a/c Dr. ....To B/R..... May 4. (3) Basant Dr. .... To bank A/c ......
In the books of Basant .....
1st Jan. (1). Ram Dr. .... To B/P. .... (2) B/P Dr. ......To Ram....
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