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In first part of accommodation bill journal entries, we have explained the journal entries when one party will draw and other party will accept the bill.
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

Reference

11th Class Accounting eBook

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Accounting Education: Accommodation Bill Journal Entries - Part 2
Accommodation Bill Journal Entries - Part 2
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Accounting Education
https://www.svtuition.org/2018/07/accommodation-bill-journal-entries-part.html
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