Answer to Question #161214 in Accounting for Agrima

Question

On Ist January 2017 for goods sold, Ramesh drew a Bill of Exchange on Mahesh for RS. 6,000 for a period of 3 months. Mahesh accepts it and returns to Ramesh. Ramesh then endorses it to Dinesh on Ist February 2017. The bill is then discounted by Dinesh on the same date with his banker at 5% p.a.

On the due date, the bill is dishonoured. The Bank paid Rs. 25 as Noting Charges Pass the necessary journal entries in the books of all the three parties.

Answer 1

Debit payments to customers credit sales - 6000 - 01.01.2017

The debt on the shipped goods is reflected - 01.01.2017

Debit notes receivable loan receivables from customers - 6000 - 01.01.2017

Debit payments to customers credit sales - 6000 - 01.02.2017

The debt on the shipped goods is reflected - 01.02.2017

Debit notes receivable loan receivables from customers - 6000 - 01.02.2017

Discount of promissory notes from the bank:

Debit current account credit short-term loan - 6000

Debit current account credit other income and expenses - 25

Debit of the account Expenses on transactions with securities Credit to the prepaid Expenses on operations with securities - 25: accounting in the bank