In the part 2 of accommodation bill journal entries, we will show such journal entries when both drawer and drawee draw the bill on each other for satisfy their money need. This money need is satisfied by discount same accommodation bill from bank.
1. If the amount is equal, there is no need to give money to other part at the time of maturity.
2. If accommodation bill draws different amount, then one party will transfer to other if same party has received more money from same party.
Suppose, A has draws Rs. 100000 accommodation bill on B and B has draws Rs. 90000 bill on A. Both discounted at discount of Rs. 1000 from bank. At the maturity, A has transferred to B Rs. 10000. Pass the accommodation journal entries
In the books of A
1. When A draws the bill on B
Bill Recievable Account Debit 100000
B account Credit 100000
2. When A discounts the bill from bank
Bank Account Debit 99000
Discount Account Debit 1000
Bill Receivable 100000
3. When A accepted the bill of B
B Account Debit 90000
Bill Payable Account Credit 90000
4. At the time of maturity, when A deposited balance amount in the account of B
B account Debit 10000
Bank Account Credit 10000
4. When A deposited balance amount to bank at the time of maturity.
Bill Payable Account Debit 90000
Bank Account Credit 90000
In the books of B
1. When B draws the bill on A
Bill Recievable Account Debit 90000
A account Credit 90000
2. When B discounts the bill from bank
Bank Account Debit 89000
Discount Account Debit 1000
Bill Receivable 90000
3. When B accepted the bill of A
A Account Debit 100000
Bill Payable Account Credit 100000
4. At the time of maturity, when B received balance amount from the account of A
Bank Account Debit 10000
A account Credit 10000
5. When B deposited amount to bank at the time of maturity.
Bill Payable Account Debit 100000
Bank Account Credit 100000
Related Contents
- Renewal of Bill Journal Entries
- Bill Dishonour Journal Entries
- Bill Sent for Collection with Bank Journal Entries
- Bill Discounting with Bank Journal Entries
- Journal Entries for Endorsement of Bill
- Journal Entries of Bill of Exchange
- Accounting of Bill of Exchange
- Accommodation Bill Journal Entries
Reference
11th Class Accounting eBook
