Page 278 - VIRANSH COACHING CLASSES

Illustration 2 :
Shivam drawn a bill on Ganesh for 21,900 on 15 May, 2019 for 60 days. He discounts the bill on
th
the same day with his Bank at 8% p.a. Calculate the amount of discount.
Solution :

Discount = Amount of Bill × Rate × Unexpried days
100 365
8 60
= 21,900 × ×
100 365
= ` 288
Illustration 3 :

Pankaj drawn a bill on Sanjay for ` 25,620 on 1st March, 2020 for 90 days. He discounts the bill on
the same day with his back at 10% p.a. Calculate the amount of discount.

Solution :
Rate Unexpried days
Discount = Amount of Bill × ×
100 366
10 90
= 25,620 × ×
100 366
= ` 630

(Note 2020 is a leap year, therefore it is 366 days)
Accounting Treatment in the Books of Drawer and Drawee :

Transaction Books of Drawer Books of Drawee
1 Drawer discount the bill Bank A/c Dr. There will be no entry
with the bank Discount A/c Dr. because Drawee is not a
To Bills Receivable A/c party to the
(Being Drawee’s acceptance transaction.
discounted with the bank)
2 Discounted bill honoured There will be no entry because Bills Payable A/c Dr.
on the due date Drawer has already received the To Cash / Bank A/c
Cash (Being our acceptance
honoured)
3 Discounted bill dishonoured Drawee’s A/c Dr. Bills PayableA/c Dr.
on the due date To Bank A/c To Drawer’s A/c
(Being discounted bill (Being our acceptance
dishonoured on the due date) dishonoured)
4 Discounted bill dishonoured Drawee’s A/c Dr. Bills Payable A/c Dr.
and noting charges paid by To Bank A/c Noting Charges A/c Dr.
bank (Being discounted bill To Drawer’s A/c
dishonoured on the due date and (Being our acceptance
Noting Charges paid by bank) dishonoured and Noting
Amount = Amount of bill + Charges payable)
Noting Charges)

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