Uday purchased goods from Shankar on Credit for ₹35,0000 at 10% Trade Discount. Uday paid ₹1,500 immediately and for the balance accepted a bill for 3 months. Before due date Uday approached Shankar with a request to renew the bill. Shankar agreed but with condition that Uday should accept a new bill for 3 months including interest at 12% p.a. Give Journal Entries in the Books of Shankar.



 
Give Journal Entries in the Books of Shankar. 

 
Journal Entry  
In the Books of Shankar. 

Solution:

Date  

Particulars 

J.F 

Debit ₹ 

Credit ₹ 

1 

Uday A/c Dr. 

To Sales A/c 

[Being Goods sold to Uday on credit @10% Trade Discount] 

 

31,500 

 

31,500 

2 

Cash A/c Dr. 

To Uday A/c 

[Being Received cash from Uday] 

 

30,000 

 

30,000 

3 

Bills Receivable A/c Dr. 

To Uday A/c 

[Being the bill is drawn and accepted] 

 

30,000 

 

30,000 

4 

Uday A/c Dr. 

To Bills Receivable A/c 

[Being Uday request to cancel bill] 

 

30,000 

 

30,000 

5 

Uday A/c Dr. 

To Interest A/c 

[Being interest due to Uday] 

 

900 

 

900 

6 

New Bill receivable A/c Dr. 

To Uday A/c 

[Being the new bill drawn and accepted] 

 

30,900 

 

30,900 

 

 

 

 

 

 

Calculation: 

Interest = 30,000*3/12*12/100 = 900 

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