Page 279 - VIRANSH COACHING CLASSES

Additional Information
A bill broker is a discount house, a firm which buys and sells bills of exchange for a fee.

Illustration on Discounting the bill with the bank
th
Ajinkya owes ` 45,000 to Ashwin. On 12 July, 2019 Ashwin received a crossed cheque of ` 15,000
from Ajinkya and for the balance ` 30,000 Ajinkya accepted a bill for 3 months. Ashwin got the bill
discounted with his bank at 15% p. a. on the same day. Give journal entries in the books of Ashwin
and Ajinkya for the following cases :
a) Bill honoured on due date.

b) Bill dihonoured on due date.
c) Bill dishonoured on due date and noting charges ` 300 paid by bank.

In the books of Ashwin
Journal
Date Particulars L. F. Debit Credit
Amount ` Amount `
2019 Bank A/c ............................................................Dr. 15,000
July 12 Bill Receivable A/c .............................................Dr. 30,000
To Ajinkya’s A/c 45,000
(Being cheque received and for balance bill drawn
and acceptance received)
July 12 Bank A/ ...............................................................Dr. 28,875
Discount A/c ........................................................Dr. 1,125
To Bills Receivable A/c 30,000
(Being Ajinkya’s acceptance discounted with the
bank)
a) Oct. 15 No Entry

b) Oct. 15 Ajinkya’s A/c ......................................................Dr. 30,000
To Bank A/c 30,000
(Being Ajinkya’s acceptance discounted with bank
dishonoured)
c) Oct. 15 Ajinkya’s A/c ......................................................Dr. 30,300
To Bank’s A/c 30,300
(Being Ajinkya’s acceptance discounted with bank
dishonoured and Noting charges paid by Bank)

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