Entry for Renewal of endorsed bill

Question A.6:
Mr. A draws on Mr. B a bill of exchange for 3 months for Rs. 5000/which Mr. B accepts on 1st January, 2008. Mr. A endorses the bill in
favor of Mr. C. Before maturity, Mr. B approaches Mr. A with the request
that the bill be renewed for a further period of 3 months at fifteen per
cent interest per annum. Mr. A pays the sum to Mr. C on that due date
and agrees to the proposal of Mr. B. Pass journal entries in the books of
Mr. A, assuming that the second bill is duly met.

Entry for Renewal of discounted bill

Question A.7:
On May 20, 2003 Mr. A accepts a 3 months bill drawn by his creditor Mr.
B for Rs. 10,000. On June 23, 2003, Mr. B discounts the same at 6 %
per annum. Mr. A being unable to meet the bill at maturity requests Mr.
B to accept 50% of the bill amount in cash and to draw another bill for 3
months for the balance sum plus interest at 10 % p.a. and Mr. B.
agrees. But before the maturity of second bill, Mr. A becomes insolvent
and is unable to pay any amount whatsoever.
You are required to record these transactions in the Books of Mr. B.

Accommodation Bill discounted and proceeds shared; 2nd bill

made to honor 1st bill
Question B.3:
P drew a bill of Rs. 30,000 on Q who accepts it for mutual
accommodation. The proceeds are to be shared by P and Q in the ratio
of 3:2. The bill is discounted by P for Rs. 29,000 and 2/5 of the proceeds
remitted to Q. Before the due date Q draws another bill for Rs. 40,000 in
order to provide funds to meet the first bill. This bill is discounted for Rs.
38,500 with the help of which the first bill is met and Rs. 5,100 are
remitted to P. Before maturity of the second bill P becomes insolvent
and Q receives a dividend of 40 paise in a rupee in full settlement.
Pass journal entries and also prepare Qs account in the books of P.

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