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ANDHRA PRADESH
Name : Sreenivasa Rao B.
Designation : Lecturer in CCP
Branch : DCCP
Institute : S.U.V.R&S.R GPW, Ethamukkala
Semester : III
Subject Name : Accountancy II
Subject Code : CCP 302
Major Topic : Bills of Exchange
Duration : 50 minutes
Sub Topic : Bill of exchange – Solution of problems
pertaining to Retirement under rebate and
renewal of bills etc..
Teaching Aids : PPT, ANIMATION
CCP 302 . 47 1
Objectives
CCP 302 . 47 2
Recap
CCP 302 . 47 3
Problem:
CCP 302 . 47 4
Solution:
Journal of Rohini
Date Particulars L Debit credit
F Rs. Ps Rs. Ps
CCP 302 . 47 6
Problem: Renewal of bill with interest
1. Jain purchases goods worth Rs.10,000 from Varma
on 1-12-07. Varma draws a bill on Jain for
Rs.10,000 for 3 months, which is accepted by Jain.
Varma discounts the same for Rs. 9,900.
On maturity date Jain fails to honour the bill
and requests Varma to draw a new bill for 3 months
for the original amount plus interest at 10% per
annum plus discounting charges of the original bill.
Varma agrees to the proposal. Make journal
entries in the books of Varma and Jain.
CCP 302 . 47 7
Solution:
Journal of Varma
Date Particulars L Debit credit
F Rs. Rs.
Ps Ps
2007 Jain account Dr
Dec.1st To Sales account 10,000 10,000
(Being the goods sold on credit)
--------------------------------------------------------
Bills receivable account Dr
To Jain account
-do- (Being the acceptance received) 10,000
10,000
-------------------------------------------------------
Bank account Dr
Discount account Dr
To Bills receivable account
9,900
-do- (Being the bill discounted with the bankers) 10,000
100
CCP 302 . 47 8
Solution:
Journal of Varma.. Contd.
Date Particulars L Debit credit
F Rs. Ps Rs. Ps
2008 Jain account Dr 10,000
Mar.4th To Bank account 10,000
CCP 302 . 47 9
Journal of Jain
Date Particulars L Debit credit
F Rs. Ps Rs.
Ps
2007 Purchases account Dr 10,000
Dec.1st To Varma account 10,000
(Being the goods purchased on credit)
------------------------------------------------------
Varma account Dr
-do- To Bills payable account 10,000
(Being the acceptance given) 10,000
------------------------------------------------------
Bills payable account Dr
To Varma account 10,000
Mar.4th (Being the bills dishonoured) 10,000
_______________________________
CCP 302 . 47 10
Journal of Jain Contd..
Date Particulars L Debit credit
F Rs. Ps Rs.
Ps
Mar.4th Interest account Dr
Discount account Dr 275
To Varma account 375
(Being the interest and discount 100
charges payable)
-----------------------------------------------------
Varma account Dr
-do- To Bills payable account
(Being the acceptance given to new 10,375
bill) 10,375
-----------------------------------------------------
-
CCP 302 . 47 11
Summary
CCP 302 . 47 12
QUIZ
CCP 302 . 47 13
Frequently asked questions
CCP 302 . 47 15