Classes By: Manish Tantia

1. On 20th July 2017 sohan drew a bill for Rs the bill of Rs. 30,000 each due respectively in
50,000 on mohan for the period of four months 1,2 and 3 months. The first bill is retained by
and mohan accepted it. It was for the mutual BABAI and is duly met. The second bill was
accommodation of both to the extent to 2/3rd discounted (discount being Rs.600) and his
and 1/3rd on 23rd July, 2017, sohan discounted met in due course. The third bill is also
the bill with the bank @12% per annum and discounted (discount being Rs900) and is
remitted one –third of proceeds to mohan. On dishonored, The noting charges being RS.150.
18th Nov, 2017 mohan drew another bill for Rs
New arrangements were duly made whereby
71000 on sohan to provide funds to meet the
KARACHI pays cash RS.10,150 and accepted a
first bill, for the period of three months, which
new bill due in 2 months for the balance of the
was accepted by sohan. On 21st nov 2017,
mohan discounted it with bank @ 12% per amount with interest at 15% p.a. The bill is
retained, on due date the same is dishonored,
annum. With this amount first bill was met out
noting charges being Rs. 180. KARACHI declared
and Rs 12580 was remitted to sohan .on first
insolvent on 15th Sept. 2018 and 35 paisa in a
Feb 2018, sohan become in solvent and mohan
received a dividend of 60 paisa in a rupee in rupee were received from his estate.
full settlement on 15th Feb. 2018. Required:-
Give journal entries to recorded the above
transactions in the books of sohan and prepare Pass journal entries in the books of BABAI.
sohan account in the ledger of mohan.
4. On the April, 2017 NANU Bank LTD. Had a
balance of Rs 45 lakhs in “Rebate on Bills,
2. Big owes Fast Rs 12000 for which the former
Discounted Account.”
accept a 3 month’s bill drawn by the latter.
During the years ended 31st March ,2018,
First immediately discount the bill with his
NANU bank ltd, discounted bills of exchange
banker, Strong bank, at 12% p.a. On the due
of Rs 51000 lakh charging interest at 15% per
date the bill is dishonored and Strong bill pays
annum, the average period of discount being
Rs. 40 as noting charges. Big pay Rs. 2360
for 73 days. Out of these, bill of exchange of Rs
including interest of rate 400 and give another
3067 lakh were due for realization from the
bill at three month’s for the balance. First
acceptor/customers after 31st march, 2018, the
indorsed the bill to his creditor Thin in full
average period outstanding after 31st march,
settlement of his debit for Rs10200. Thin
2018 being 53 days.
discount the bill with banker strong bank who
You are required to pass the necessary journal
charge 80 as discount. Before maturity Big
entries and show the Ledger
become bankrupt and first and final dividend
Accounts in the books of NANU bank ltd.
for 20 Rs. In a rate is realized from his state,
Pertain to
Show the journal entries in three books of Thin
a) Rebate on bills discounted account
and Strong bank and the ledger account of Big
b) Interest and discount account.
of first.
3. BABAI sold goods to KARACHI fro Rs. 90,000
5. On 1st APR. 2018 Alok Accepted a bill for
on 1st Apr., 2018 for which the latter accepted
RS.5000 fro 3 months drawn by KUNTAL.

PATHFINDER COMMERCE ACADEMY 1

Classes By: Manish Tantia
KUNTAL endorsed the bill in favour of Chinu.
At maturity, the bill was dishonored. Pass the
journal Entries in the books of KUNTAL.
6. Gouru and Giyani were friends and in need of
funds. On 1st April, 2018 Gouru drew a bill for
RS 200000 for three months on Giyani, on
4.4.2018 gouru got the bill discounted at 15%
per annum and remitted half of the proceeds
to gyani. On the due date, gyani could not
meet the bill, instead, gouru accepted gyani’s
bill Rs 120000 on 4th july,2018 for two months.
This was discounted by gyani at 15% per
annum and out this Rs 19500 was paid to
gouru after deducting Rs 500 discounted
charges. Due to financial crisis, gouru became
insolvent and the bill drawn on him was
dishonored and his estate paid 40%
Days of grace for discount purposes may be
ignored.
Required:
a) Give journal entries and
b) Prepare Gyani’s account –in the books of
gouru.
7. VISHAN for mutual accommodation of
TITHAN and himself drew upon the latter a
three months bill for RS. 24,000 on 1st July,
2017, which was duly accepted. VISHAN
discounted the bill at 6% p.a. on 4th July,2017
and remitted ½ of the proceeds to TITHAN.
On 1st Aug. 2017, TITHAN drew and VISHAN
accepted a bill at 3 months for Rs. 9600. On 4
Aug. 2017 TITHAN discounted the bill at 6%
p.a. and remitted half the proceeds to
VISHAN. At maturity VISHAN met his
acceptance, but TITHAN failed to meet his and
VISHAN had to take up. VISHAN drew and
TITHAN accept a new bill at two months on
4th Nov. 2017, for the amount due to VISHAN
plus RS. 200 as interest. On 1st January 2018,
TITHAN become insolvent and a first and
final dividend of 40 paisa in the rupee was
received from his estate on 31st March, 2018.
NOTE:- Days of grace for discounting
purposes may be ignored.
Required:
Pass the journal entries in the books of
VISHAN.
8. Sunil owed Anill Rs 8000. Anil draws a bill on
Sunil for that amount for 3 months on 1st April.
Sunil accepts it and returns it to anil. On 15th
April, anil discounts it with Citi bank at a
discount of 12% p.a. on the due date the bill
was dishonored, the bank paid noting charges
Rs 100 anil settles the bank’s claim along with
noting charges in cash. Sunil accepted another
bill for 3 months for the amount due plus
interest of Rs 3000 on 1st July. Before the new
bill become due , Sunil retires the bill with a
rebate the bill with a rebate of Rs 500. Show
journal entries in books of anil.
9. On 1st Jan. 2018, A sells goods fro Rs.10,000 to
B and draws a bill at three months for the
amount. B accept it and return it to A. On 1 st
March, 2018, B retires his acceptance under
rebate of 12% per annum. Record these
transaction in the journals of B.
10. A draws upon B three bills of Exchange of Rs
3000 Rs 2000 and RS 1000 respectively. A week
later his first bill was mutually cancelled, B
agreeing to pay 50% of the amount in cash
immediately and for the balance plus interest
Rs 100, he accepted a fresh Bill draws by A.
this new bill was endorsed to C who
discounted the sane with his bankers for RS
1500 the second bill was discounted by A at
5% . This bill on maturity was returned
dishonored (nothing charge being Rs 30).The
third bills was retained till maturity when it
was duly met.
PATHFINDER COMMERCE ACADEMY 2
Classes By: Manish Tantia
Give the necessary journal entries recording
the above transaction in the books of A.
11. Journalize the following in the books of Don:
a) Bob informs Don that Roy’s acceptance for Rs
3000 has been dishonored and noting charges
are RS 40. Bob accepts Rs 1000 cash and the
balance as bill at three months at interest of
10%. Don accepts from Ray his acceptance at
two months plus interest @12% p.a.
b) james owes Don RS 3200; he sends Don’s own
acceptance in favour of Ralph for Rs 3160; in
full settlement.
c) Don meets his acceptance in favour of Singh
for Rs 4500 by endorsing john’s acceptance for
4450 in full settlement.
d) Ray’s acceptance in favour of Don retried one
month before due date, interest in taken at the
rate of 6% p.a.
12. Arun and Anand were friends and in need of
funds. On 1-1-2018 Arun drew a bill fro Rs.
2,00,000 fro 3 months on Anand. On 1-1-2018
Arun drew a bill for RS. 2,00,000 for 3 months
on Anand. On 1-4-2018 Arun got the book
discount of 10% p.a. and remitted half of the
proceeds to Anand. On the due date, anand
could not met the bill, instead, Arun accepted
Anand’s bill for Rs. 120,000 on 4-4-2018 fro two
months. This was discounted by the Anand at
12% p.a. Out of this Rs. 19,600 was paid to
Arun after deducted Rs. 400 discounting
charges. Due to financial crisis, Arun become
insolvent and the bill drawn on him was
dishonoured and his estate paisa 50%. Days of
grace for discount purposes may be ignored.
Give journal entries in the books of Arun and
Anand’s account in Arun’s books and Arun’s
account in the books of Anand.
13. Mr. David draws two bills of exchange on 1-1-
2018 for Rs. 6,000 and Rs. 10,000. The bill of
exchange for Rs. 6,000 is for two months while
the bills exchange for Rs. 10,000 is for three
months. These bills are accepted by Mr.
Thomas. On 4-3-2018 Mr. Thomas requests Mr.
David to renew the first bill with interest at
18% p.a. for a period of two months. Mr.
David agrees to this proposal. On 20-3-2018
Mr. Thomas retires the acceptance for Rs.
10,000, the interest rebate i.e. discount being
Rs. 100. Before the due date of the renewed
bill, Mr. Thomas become insolvent and only 50
paisa in a rupee could be recovered from his
estate.
You are required to give the journal entries in
the books of Mr. David.
14. On 1st jan,2018, A sells goods for Rs. 10,000 to
B and drawn a bill at three months for the
amount. B accepted it and return it to A. On 1st
March, 2018, B retires his acceptance under
rebate of 12% per annum. Record there
transaction in the journal of A and B.
15. Shubham draws on Rajendra a bill for Rs.
45000 on 1st June, 2018 for 3 months. Rajendra
accepts the bill and sends it to Shubham who
gets it discounted for Rs. 44,100. Shubham
immediately remits Rs. 14,700 to Rajendra. On
the due date Shubham, being unable to remit
the amount due, accepts a bill for Rs. 63,000 for
three months which is dishonoured by
Rajendra for Rs. 61,650. Rajendra sends Rs.
11,100 to Shubham. On the due date Shubham
becomes insolvent, his estate paying forty
paisa in the rupee. Give journal entries in the
books of Shubham and Rajendra.
16. On 1st July, 2018 G drew a bill for Rs. 80,000 for
months on H for mutual accommodation. He
accepted the bill of exchange.
PATHFINDER COMMERCE ACADEMY 3
Classes By: Manish Tantia
G had purchased goods worth Rs. 81,000 from
J on the same date. G endorsed H’s acceptance
to J in full settlement.
On 1st Sept., 2018, J purchased goods worth Rs.
90,000 from H. J endorsed the bill of exchange
received from G to H and paid Rs. 9000 in full
settlement of the amount due to H.
On 1st October, 2018 H purchased goods worth
Rs. 1,00,000 from G. He paid the amount due
to G by cheque. Give the necessary journal
entries in the books of H.
17. Record the following transactions in the
journal of Ram and Hari:
Ram sells goods for Rs. 1,00,000 to Hari on 1st
January,2018 and the on the same day Draws a
bills on Hari at three months fro the amount.
Hari accept it and return it to Ram, who
discounts it on 4th January,2018 with his bank
at 12% p.a. The acceptance is dishonoured on
due date and the bank pays Rs. 250 as noting
charges.
18. For the mutual accommodation of X and Y on
1st April, 2018, X drew a four months Bill on Y
for Rs. 4000. Y returned the bill after the
acceptance on the same date. X discounts the
bill from his bankers @ 6% p.a. and remit 50%
of the proceed to Y. On due date X is unable to
send the amount due and therefore Y draws a
bill for Rs. 7000, which is duly accepted by X.
Y discounts the bill for Rs. 6600 and sends Rs.
1300 to X. Before the bill is due for payment X
become insolvent. Later 25 paisa in a rupee
received from his Estate.
19. Anil draws a bill for Rs. 9000 on Sanjay on 5th
April, 2018 for 3 months, which Sanjay returns
it to Anil after accepting it. Anil gets it
discounted with the bank for Rs. 8820 and
remits 1/3rd amount to Sanjay.
On the due date Anil fails to remit the amount
due to Sanjay, but he accepts a bill for Rs.
12,600 for three months, which Sanjay
discounts it for Rs. 12330 and remits Rs. 2200
to Anil. Before the maturity of the renewed bill
Anil become insolvent and only 50 % was
realised from his estate on 15th October,2018.
Pass necessary Journal entries for the above
transactions in the books of Anil.
20. Mr. B accepts a bill for Rs. 10,000 drawn on
him by Mr. A on 1st August, 2018 fro 3 months.
This was for the amount which B owed to A.
And on the same date Mr. A got the bill
discounted at his bank for Rs. 9800.
On the due date, B approached A fro renewed
of the bill. Mr. A agreed on condition that Rs.
2000 be paid immediately along with interest
on the remaining amount at 12% p.a. for 3
months and that for the remaining balance B
should accept a new bill for 3 months. These
arrangements were carried through. On 31st
December,2018 B become insolvent and his
estate paid 40%.
Give Journal Entries in the books of Mr. A.
21. On 1st Jan,2018 Vinod drew and Pramod
accepted a bill at three months for Rs. 2000. On
4th Jan,2018 Vinod discounted the bill at his
bank at 15% p.a. and remitted half the
proceeds to Pramod. On 1st Feb. 2018 Pramod
drew and Vinod accepted a bill at four month
for Rs. 1500. On 4th Feb 2018 Pramod
discounted the bill at 15% p.a. with his bank
and remitted half the proceeds to Vinod. They
both agreed to share the discount equally.
At maturity Vinod met his acceptance, but
Pramod dishonoured his and Vinod had to
pay the bill. Vinod drew and Pramod accepted
a new bill at three months for the original bill
plus interest at 18% p.a. on 1st July,2018
PATHFINDER COMMERCE ACADEMY 4
Classes By: Manish Tantia

Pramod became Insolvent and only 50 Paisa in

a rupee was received from him.
Record the above transactions in Vinod’s
Journal.

PATHFINDER COMMERCE ACADEMY 5