Bill of Exchange Journal Entries Examples

Example 

On 1st March 2018, Mr. Mohan sold goods to Mr. Sohel for Rs. 5,00,000 and received Rs. 250000 in cash and drew two bills, first Rs. 2,00,000 and second for Rs. 50,000 of two months each.  Both bills were duly accepted by Mr. Sohel. First bill was endorsed to Sohan in the settlement of his account of Rs. 220,000 and second bill was discounted from the bank at the rate of 15% pa. On the due date of these bills, both bills were dishonoured. Sohan paid Rs. 2000 and bank paid Rs. 1000 as noting charges.

Mr. Sohel paid Rs. 2,00,000 and noting charges in cash and accepted new bill for the balance for 4 months. The interest on the balance @ 20% pa was paid in cash. On the due date of the new bill, Mr. Sohel became insolvent and nothing is recovered from his property. Give journal entries in the books of drawer.

In the books of Mr. Mohan

1st March 2018

Mr. Sohel Account Debit Rs. 5,00,000

Sales Account Credit Rs. 5,00,000

When Mr. Mohan Draws two bills and Mr. Sohel Accepted. 

1st March 2018

Cash Account Debit 250,000

1st B/R Account Debit 2,00,000
2nd B/R account Debit 50,000

Mr. Sohel Account Credit 5,00,000

When Mr. Mohan Endorsed to Mr. Sohan

Mr. Sohan Account Debit  220,000

1st Bill Receivable Account Credit 2,00,000
Discount Received Credit 20,000

When Second Bill has discounted from bank

Bank Account Debit Rs. 48750

Bill Discounting Account Debit 1250

2nd Bill Receivable Account Credit 50000

When Both Bills are Dishonoured by Drawee Mr. Sohel 

4th May 2018

1st Bill

Mr. Sohel Account Debit 202000

Discount Received Account Debit 20000

Mr. Sohan Account Credit 222000

( Remember Journal entries of endorsed bill dishonored )
2nd Bill


Mr. Sohel Account Debit 51000

Bank Account Credit 51000

( Remember journal entries discounted bill with bank dishonored )

Mr. Sohel Paid Cash to Mr. Mohan

Cash Account Debit 2,03,000

Mr. Sohel Account Credit 2,03,000

When Interest Received in Cash on Balanced Amount for New Bill

Cash Account Debit 2500

Interest Account Credit 2500

When New Bill Draws

3rd Bill Receivable Account Debit 50000

Mr. Sohel Account Credit 50000


When Drawee Insolvent = Dishonoured bill

Mr. Sohel Account Debit 50000

3rd Bill Receivable Account Credit 50000

( Remember  : Insolvency of Acceptor of Bill Journal Entries )

Transfer to BAD Debt Account Loss of receivable money from drawee or Debtor 

BAD DEBTS Account Debit 50000

Mr. Sohel Account Credit 50000


Related Contents 


  1. Renewal of Bill Journal Entries 
  2. Bill Dishonour Journal Entries 
  3. Bill Sent for Collection with Bank Journal Entries 
  4. Bill Discounting with Bank Journal Entries
  5. Journal Entries for Endorsement of Bill
  6. Journal Entries of Bill of Exchange
  7. Accounting of Bill of Exchange 
  8. Accommodation Bill Journal Entries 

Reference


11th Class Accounting eBook

COMMENTS

Comments on this Website
.
Share above Content to Your Friends



Meet Your Teacher

Vinod Kumar Prof. Vinod Kumar has received the post graduate degree in Commerce from ... read more »

Name

access account accountant Accounting accounting definitions accounting ebook Accounting education accounting procedure accounting process outsourcing Accounting Software advance advertising africa Amalgamation amendments announcements Annuity assets audit auditing Australia B.Com. balance sheet bank Bank reconciliation banking basic accounting BBA benefits best bill black money blog bloggers book keeping bookkeeping Branch Accounting - full tutorial budget Budget variance business businessman CA calculator canada capital capital budgeting career cash cash book cash flow statement Chiense children china class coaching coins college commerce commerce students company computer computer accounting conference Contact vinod kumar corporate accounting cost cost accounting cost center cost centre CPA credit credit card cs currency data Debit and credit debit cards debt debtor degree depletion depreciation documents dollar domain Downloads Dubai e-accounting earning education Education Loans email employee EPF ERP euromoney examination excel excise duty expenses facebook factor of loan fans feature fifo FII fiji finacle finance Financial financial accounting fire insurance flickr flow forensic forex formula france fraud free fun function fund GAAP GDP gdr germany gold goodwill goodwill accounting google google apps google apps google base google buzz google calendar Google docs google finance google fusion tables google talk govt. GST guide health Hindi Hindi Language history holding company How to treat FBT in Tally 9 HRA ICAI ICAWI ICICI Bank IFRS income income statement Income Tax India indian railway Indonesia inflation inflation accounting infographics information inspiration insurance insurance accounting interest international Internet Introduction of Tally 9 inventory investment invoice IT Japan Job costing journal entries Kalculate keyboard kindle kuwait laptop law LBT learning lease lecture ledger leducation Leverage Analysis liabilities lifo linkedin loan logical point loss loss of profit M.Com. m.phil malaysia management accounting manual accounting manufacturing account market marketing mastercard material MBA MCA media migration mobile money ms word ms. excel multi currency in tally 9 Multicurrency Accounting mutual fund national security new and sacrifice ratio new york times new zealand news NGO nonprofit-accounting North Georgia Mountains NPV NSE odbc office oman online application online accounting otcei pakistan parents pay pal pdf pie chart pie chart of income pnb podcast ppf presentation price privacy policy prize money prof. vinod kumar profit profit and loss account project management provision purchase puzzles quickbooks Quote quotes quotes of svtuition rating agency ratio analysis RBI readers real estate rectification of errors remote control reports reserves responsibility accounting retirement revenue Revenue reserves review risk rupees salary sale saudi arabia saving sbi scholarship school SEBI security service tax share share trading Shares shri lanka singapore sms social accounting society solution South Africa stock stock exchange structure student students study subsidiary company svtuition swiss bank tally tally 9 Tally 7.2 Tally 9 Tally.ERP 9 tanzania tax Tax Accounting TDS teacher teaching technology test testimonial testimonials thailand tips trading trading on equity transaction trend trial balance tuition twitter UAE UGC - NET Commerce UK United Arab Emirates university usa valuation VAT Video Voucher and vouching wikipedia working capital youtube
false
ltr
item
Accounting Education: Bill of Exchange Journal Entries Examples
Bill of Exchange Journal Entries Examples
https://1.bp.blogspot.com/-oqH8ApGrY34/W2P37X4cGvI/AAAAAAAAVwc/wuU6Fh0iHWwpe9TKOZ8rHl08pVS9G9xRgCLcBGAs/s1600/images.jpg
https://1.bp.blogspot.com/-oqH8ApGrY34/W2P37X4cGvI/AAAAAAAAVwc/wuU6Fh0iHWwpe9TKOZ8rHl08pVS9G9xRgCLcBGAs/s72-c/images.jpg
Accounting Education
http://www.svtuition.org/2018/08/bill-of-exchange-journal-entries.html
http://www.svtuition.org/
http://www.svtuition.org/
http://www.svtuition.org/2018/08/bill-of-exchange-journal-entries.html
true
2410664366776677676
UTF-8
Not found any lecture VIEW ALL Readmore Reply Cancel reply Delete By Home PAGES Lectures View All RECOMMENDED FOR YOU Category ARCHIVE SEARCH ALL Lectures Not found any lecture match with your request, please help to write it and send it to our email at vinod@svtuition.org for making this website free accounting and finance encyclopedia. Back Home Sunday Monday Tuesday Wednesday Thursday Friday Saturday Sun Mon Tue Wed Thu Fri Sat January February March April May June July August September October November December Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec just now 1 minute ago $$1$$ minutes ago 1 hour ago $$1$$ hours ago Yesterday $$1$$ days ago $$1$$ weeks ago more than 5 weeks ago Followers Follow THIS CONTENT IS PREMIUM Please share to unlock