Q1. Nikhil sold goods for 23,000 to Akhil on Dec. 1, 2005. He drew upon Akhil a bill of exchange for the same amount payable after 2 months. Akhil accepted the bill and sent it back to Nikhil. Nikhil discounted the bill immediately with his bank @ 12p.a. On the date Akhil dishonoured the bill of exchange and the bank paid 100 as noting charges. Akhil requested Nikhil to draw a new bill upon him with interest @10% p.a. which he agreed. The new bill was payable after two months. A week before the maturity of the second bill Akhil requested Nikhil to cancel the second bill. He further requested to accept 10,000 in cash immediately and drew a third bill upon him including interest of 500. Nikhil agreed to Akhils’ request.
The third bill was payable after one month. Akhil met the third bill on its maturity. Record the necessary journal entries in the books of Nikhil and Akhil and also prepare Akhil’s account in the books of Nikhil and Nikhil’s account in the books of Akhil.
Q2. A sold goods to B for 8,000 and drew a bill on B for three months who duly accepted the same. A endorsed the bill to C. C endorsed it to his creditor D. D discounted the bill at 15% per annum. On the date of maturity, the bill was dishonoured and bank paid noting charges amounting 50.
Show the necessary Journal entries in the books of all the parties.
Q3. On 1st July, 2011, A draws on B, who owed him 25,000, two bills, one for 15,000 for three months and another for 10,000 for two months. B accepts these bills.
A endorses on 3rd July the first bill to his creditor C in full settlement of his account of 15,500 and discounts the second bill on 4th July with his banker @12% p.a. The first bill is duly paid at maturity but the second bill is dishonoured and 150 are paid as noting charges. On 5th September A draws and B accepts a third bill for three months for 10,450 in lieu of the dishonoured bill. This bill is duly paid at maturity/ Give Journal Entries to record these transactions in the books of A and B.
Q4. On 1st January, 2012, Ram drew on Mohan, who is his debtor for 15,000 three bills of exchange: First for 4,000 at one month, Second for 5,000 at two months and third for 6,000 at three months. Mohan accepted all the three bills.
On 10th January, 2012, Ram endorsed the first bill to his creditor Sohan in full settlement of his account of 4,120. This bill was duly met on maturity.
On 20th January, 2012, the second bill was discounted form the bank for 4,850. This bill was disonoured on the due date and bank paid 40 as noting charges. On Mohan’s request Ram drew a fourth bill on Mohan for 2 months for the amount due plus 200 as interest.
Third bill was paid under a rebate of 15% p.a. one month before maturity. The fourth bill was sent to bank for collection on 4th May, 2012 and was duly met on maturity.
Pass Journal entries in the books of Ram, Mohan and Sohan.
(A) A Bill receivable for 10,000, which had been discounted for 9,700, is dishonoured and the Bank paid 20 as noting charges.
Pass entries in the books of drawer and drawee.
(B) Journalise the following in the books of X: Y’s acceptance for 2,00,000 which was discounted By X from the bank has been dishonoured, noting charges paid by bank being 100.
(C) Geeta’s acceptance of 20,000 which had been discounted with the bank for 19,500 has been returned by the Bank dishonoured. Noting charges paid by Bank 25.
Q6. On 1st Jan. 2012, Staish drew on Harish three bills of exchange in full settlement of claims, the first for 14,000 at one month; the second for 16,000 at two months and the third for 18,000 at three months. The bills were duly accepted by Harish. the first bill was endorsed by Satish to his creditor Rajnish on 3rd Jan. 2012.
The second bill was discounted on 15th Jan. for 15,900 and the third bill was sent to bank for collection on 4the Feb. All the bills were met on maturity except the seoncd bill which was dishonoured. Noting charges being paid 240. Satish charged 300 for interest from Harish and drew on him a fourth bill for two months for 16,540. The fourth bill was duly met on maturity.
Give Journal entries in the books of Satish and Harish.
Q7. X draws upon Y a bill of 10,000 for three months on 1st July, 2011. The bill was duly accepted and returned by Y. On due date bill became dishonored and noting charges paid under each of the following circumstances 75. Pass entries in the following cases.
(i) If drawer retains the bill with him till due date.
(ii) if drawer discounts the same with his Banker and noting charges paid by the Banker.
(iii) If drawer endorses the same to his creditor Z and noting charges paid by Z.
(iv) If drawer sends the bill for collections to his Banker and noting charges paid by the Banker.