Sangeeta accepted a bill for ₹18,000 dawn by Geeta at 3 months. Geeta Discounted the bill for ₹17,400. Before the due date Sangeeta approached Geeta for renewal of the bill. Geeta agreed on the condition that Sangeeta should pay ₹6,000 immediately and for the balance she should accept a new bill for 4 months along with interest ₹550. The arrangements were carried through. But on the due date of new bill Sangeeta became insolvent and 35 paisa in a rupee could be recovered from her estate. Give Journal Entries in the Books of Sangeeta and prepare Sangeeta ‘s account in the books of Geeta.
Give Journal Entries in the Books of Sangeeta and prepare Sangeeta ‘s account in the books of Geeta.
Journal Entry
In the Books of Sangeeta.
Date | Particulars | L/F | Debit ₹ | Credit ₹ |
1. | Geeta A/c Dr. To Bills Payable A/c [Being accepted a bill] |
| 18,000 |
18,000 |
2. | Bills payable A/c Dr. To Geeta A/c [Being bill cancel and approach for new bill] |
| 18,000 |
18,000 |
3. | Geeta A/c Dr. To Bank A/c [Being part amount paid immediately] |
| 6,000 |
6,000 |
4. | Interest A/c Dr. To Geeta A/c [Being interest paid on balance amount] |
| 550 |
550 |
5. | Geeta A/c Dr. To New bill Payable A/c [Being accepted new bill for 4 monhs] |
| 12,550 |
12,550 |
6. | New Bills Payable A/c Dr. To Geeta A/c [Being the new bill get dishonored] |
| 12,550 |
12,550 |
7. | Geeta A/c Dr. To Cash A/c To Deficiency A/c [Being Sangeeta became insolvent and pay 35 paisa in a rupee] |
| 12,550 |
4,393 8,157 |
Ledger account
In the Books of Geeta
|
Dr. Sangeeta Account Cr. |
Date | Particulars | J.F | Amount | Date | Particulars | J.F | Amount |
| To Balance b/d |
| 18,000 | 1 | By Bill Receivable |
| 18,000 |
2. | To Bank A/c |
| 18.000 | 4. | By Bank A/c |
| 6,000 |
4. | To Interest |
| 550 | 5. | By Bills Receivable |
| 12,550 |
6. | To Bills Receivable |
| 12,550 | 7. | By Cash A/c |
| 4,393 |
|
|
|
|
|
|
|
|
|
|
|
|
| By Bad Debts |
| 8,157 |
|
|
| 49,100 |
|
|
| 49,100 |
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