BILL OF EXCHANGE

WITH SOLUTION

Drawer : Soundariya, Neelam Bhawan, Kalyan

Drawee : Sugandi, Dastur Nagar, Amaravati Payee : Umesh , Deogad Period : 90 days Amount : Rs. 7,555 Date of bill : 15th March 1995 Accepted on : 20th March 1995

On 10th March, 1995 Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2 months bill for Rs. 3,000 on Samir Choudhary, Main Road, and Belapur. Samir Choudhary accepted the bill on 15th March 1995

Drawer : Mr. Avadhoot Raktade, (March 2012)

586. Main Road, AjaraDrawee : Mr. Mukund Aglawe

133, Chandni Chowk, Panvel. Amount : Rs. 8,800.Period : Two Months. Date of Bill : 1 st May, 2010. Date of Acceptance : 5 th May, 2010.

Drawer : Vijay Bhat, Main Road, Nagpur.Drawee : Ashok Kulkarni, M.G. Road, Nagpur. Payee: Anil Jadhav, Pune. Amount: Rs. 6,950. Period: 80 days. Date of Bill: 7th March, 1996. Accepted on :10th March, 1996. For 90 days.

Drawer : Priti Chavan, Chandika Road, Malvan. Drawee : Snehlata Patil, Prashant Nagar, AmbajogaiAmount of Bill : Rs, 10,000/-Period : 2 months.Date of Bill : 1st January, 1996Date of Acceptance: 5th January, 1996

Drawer : Abhijit Patil, Vikram nagar, Patna.Drawee : Tejas Kapare, Kothrud, Pune.Payee : Amey Patki, Nagpur. Amount : Rs. 7500Period : 60 daysTerm : After sightDate of Bill Drawn : 1st June 2006Date of Acceptance : 11th June 2006Accepted bill for Rs. : 7000 only.

Drawer: Yamini Gupta, Sarvapriya Vihar, DelhiDrawee – Kamini Sharma, Raj baug, Agra. Period – 100 days. Term – After acceptanceDate of Bill – 1st January, 2007Amount – Rs. 10,500/- Date of Acceptance – 3rd January, 2007

On 1st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon him a new bill for the remaining amount at 3 months together with an interest @ 10% p.a. Ramchandra agreed. The second Bill was duly honoured. Give Journal entries in the books of Ramchandra.

Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal discounted the bill with his bank @ 6 % p.a. On due date the bill was dishonoured and Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon him a new bill for the remaining amount at 3months together with an interest at 10% p.a. Premlal agreed and the second bill was duly honoured. Give the Journal entries in the books of Premlal.

•Archana purchased goods from Babita on credit for Rs. 20,000. On next day Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the balance amount for four months. Babita discounted the bill with her bank for Rs. 9600/-. Before the due date Archana approached Babita with a request to renew the Bill. Babita agreed with the condition that Archana should pay Rs. 6000 along with interest of Rs. 120 and accept a new bill for the balance. These arrangements were duly carried out. New bill is met on the due date. Pass journal entries in the books of Babita.

Bhagyashri sold goods to Rupa worth Rs. 24,000 to Rupa. On the next day Rupa paid Rs. 10,000 in cash and accepted 4 months bill for balance amount drawn by Bhagyashri. Bhagyashri discounted the bill at 10% p.a. after one month with her bank. On due date Rupa dishonoured her acceptance and noting charges amounted to Rs. 200. Rupa paid half the amount of the bill and full amount of noting charges. Rupa accepted a new bill at 2 months for the balance amount plus interest Rs. 100. Pass necessary journal entries in the books of Bhagyashri.

Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a period of three months. Baloo accepts and return it to Kaloo. Kaloo discounted the bill with his bank @ 12 % p.a. On due date, the bill was dishonoured noting charges amount to Rs. 30. Kaloo then draws a bill for the balance plus interest of Rs. 170. Before the due date of this bill Baloo pays the amount at a discount of Rs. 40 to retire the bill. Pass Journal Entries in the books of Kaloo.

Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Minal.

Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns it to Sonia who discounts the bill with the bank at a discount of 8% p.a. Before the due date of Bill Moni requested Sonia to accept Rs. 4000 in cash and draw a bill for the balance plus interest at 12% p.a. for two months. Sonia draws a bill as the request is agreed. The bill is sent to bank for collection. On the due date the bill was honoured. Pass the necessary journal entries in the books of Sonia

Prakash drew a bill for Rs. 4,000 on Anand on 1st May, 1976 for three months. This was for the amount which Anand owed to Prakash. Anand accepts the same and return it to Prakash who discounted at his bank for Rs. 3,900. On 1st Aug, 1976 Anand requested Prakash to renew the bill and Prakash agreed on the condition that Rs. 1,000 is paid immediately and Anand should accept the new bill for 3 months for the balance payable plus interest of Rs. 45. These arrangements were carried through. However, on 1st October, 1976, Anand retired his acceptance for Rs. 3, 035. Pass journal entries in the books of Prakash.

Mukund owes (be obligated) Prakash Rs. 4000 for which Prakash draws a bill for 2 months on 1st February, 1989. Mukund accepts it and returns it to Prakash. On 4th March, 1989, Mukund approaches Prakash and request him to accept Rs. 1000 in cash and draw a fresh bill for 3 months for the balance plus interest @ 10% p.a. Prakash accepts the request and draw a bill accordingly which is accepted by Mukund. On 1st June 1989 Mukund retired his acceptance under discount of Rs. 30/-. Pass journal entries in the books of Prakash.

Rupali accepted a bill for Rs. 2,000/- drawn by Deepali at three months. Deepali got the bill discounted with her bank for Rs. 1,900. Before the due date Rupali approached Deepali for renewal of the bill. Deepali agreed on the condition that Rs. 1,000/- be paid immediately together with interest on the remaining amount at 6% p.a. For balance Rupali should accept a new bill for three months. These arrangements were carried through but afterwards, Rupali become Insolvent and only 40 % of the amount could be recovered from her estate. Give journal entries in the books of Deepali.

•Chanda accepted a bill for Rs. 6,000 drawn by Nanda at three months. Nanda got the bill discounted with his bank for Rs. 5,700. Before the due date, Chanda approached Nanda for renewal of the Bill. Nanda agreed on the condition that Rs. 3,000 is paid immediately together with an interest on remaining amount at 18% p.a. for four months and for the balance Chanda should accept a new bill. But afterwards Chanda become insolvent and only 25% of the amount could be recovered from her estate. Pass journal entries in the books of Nanda.

Pankaj draws a bill on Anil worth Rs. 8,000 for three months which was accepted by Anil. On the same date Pankaj discounted the bill with his bank @ 10 % p.a. On the due date Anil dishonoured his acceptance. Anil paid Rs. 4,000/- to Pankaj and accepted a fresh bill for two months for the balance including interest of Rs. 40. Anil became insolvent before the maturity of the bill and 50 paise in a rupee was received at first and final dividend from his estate. Give Journal entries in the books of Pankaj

On 1st March, 2013. Ramchandra sold goods to Raman worth Rs. 8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months drawn by Ramchandra. Ramchandra discounted the bill with his bank @ 6% p.a. On due date the bill was dishonoured and Raman requested Ramchandra to accept Rs. 4,000/- immediately and draw upon him a new bill for the remaining amount at 3 months together with an interest @ 10% p.a. Ramchandra agreed. The second Bill was duly honoured. Give Journal entries in the books of Raman.

Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal accepted the bill for Rs. 10,000/- at 3 months drawn by Premlal. Premlal discounted the bill with his bank @ 6 % p.a. On due date the bill was dishonoured and Sunderlal requested Premlal to accept Rs. 4,000 immediately and draw upon him a new bill for the remaining amount at 3months together with an interest at 10% p.a. Premlal agreed and the second bill was duly honoured. Give the Journal entries in the books of Sunderlal

Archana purchased goods from Babita on credit for Rs. 20,000. On next day Archana paid Rs. 10,000 to Babita and accepted a bill drawn by Babita for the balance amount for four months. Babita discounted the bill with her bank for Rs. 9600/-. Before the due date Archana approached Babita with a request to renew the Bill. Babita agreed with the condition that Archana should pay Rs. 6000 along with interest of Rs. 120 and accept a new bill for the balance. These arrangements were duly carried out. New bill is met on the due date. Pass journal entries in the books of Archana.

Bhagyashri sold goods to Rupa worth Rs. 24,000 to Rupa. On the next day Rupa paid Rs. 10,000 in cash and accepted 4 months bill for balance amount drawn by Bhagyashri. Bhagyashri discounted the bill at 10% p.a. after one month with her bank. On due date Rupa dishonoured her acceptance and noting charges amounted to Rs. 200. Rupa paid half the amount of the bill and full amount of noting charges. Rupa accepted a new bill at 2 months for the balance amount plus interest Rs. 100. Pass necessary journal entries in the books of Rupa.

Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on Baloo for a period of three months. Baloo accepts and return it to Kaloo. Kaloo discounted the bill with his bank @ 12 % p.a. On due date, the bill was dishonoured noting charges amount to Rs. 30. Kaloo then draws a bill for the balance plus interest of Rs. 170. Before the due date of this bill Baloo pays the amount at a discount of Rs. 40 to retire the bill. Pass Journal Entries in the books of Baloo

Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts the bill and return to Minal. Minal discounted the bill @ 12 % p.a. with the bank. On Maturity Usha finds herself unable to make payment of the bill and requested Minal to renew the bill. Minal accepts the proposal on the condition that Usha should Pay Rs. 2,000 in cash and accept a new bill at one month along with interest at 10% p.a. These arrangements were carried through. Usha retires the bill by paying Rs. 3015/- Pass Journal Entries in the books of Usha.

Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts the bill and returns it to Sonia who discounts the bill with the bank at a discount of 8% p.a. Before the due date of Bill Moni requested Sonia to accept Rs. 4000 in cash and draw a bill for the balance plus interest at 12% p.a. for two months. Sonia draws a bill as the request is agreed. The bill is sent to bank for collection. On the due date the bill was honoured. Pass the necessary journal entries in the books of Moni.

Vicky owes Rs. 12,000 to Bunty and accepts 3 months’ bill drawn by Bunty who discounts the same after a month at 10% p.a. with his bank. On due date the bill has been dishonoured and noting charges amounted to Rs. 100. Vicky then paid 25% of the amount of the bill and full amount of noting charges by crossed cheque and accepted a new bill for the balance plus interest at 12% p.a. for 3 months. New bill was sent to the bank for collection by Bunty. On due date the bank collected the amount of the new bill from Vicky and debited the bank charges Rs. 70 to Bunty’s account. Pass Journal Entries in the books of Bunty and Bunty’s account in the ledger of Vicky.

Rupali accepted a bill for Rs. 2,000/- drawn by Deepali at three months. Deepali got the bill discounted with her bank for Rs. 1,900. Before the due date Rupali approached Deepali for renewal of the bill. Deepali agreed on the condition that Rs. 1,000/- be paid immediately together with interest on the remaining amount at 6% p.a. For balance Rupali should accept a new bill for three months. These arrangements were carried through but afterwards, Rupali become Insolvent and only 40 % of the amount could be recovered from her estate. Give journal entries in the books of Rupali

Chanda accepted a bill for Rs. 6,000 drawn by Nanda at three months. Nanda got the bill discounted with his bank for Rs. 5,700. Before the due date, Chanda approached Nanda for renewal of the Bill. Nanda agreed on the condition that Rs. 3,000 is paid immediately together with an interest on remaining amount at 18% p.a. for four months and for the balance Chanda should accept a new bill. But afterwards Chanda become insolvent and only 25% of the amount could be recovered from her estate. Pass journal entries in the books of Chanda

Pankaj draws a bill on Anil worth Rs. 8,000 for three months which was accepted by Anil. On the same date Pankaj discounted the bill with his bank @ 10 % p.a. On the due date Anil dishonoured his acceptance. Anil paid Rs. 4,000/- to Pankaj and accepted a fresh bill for two months for the balance including interest of Rs. 40. Anil became insolvent before the maturity of the bill and 50 paise in a rupee was received at first and final dividend from his estate. Give Journal entries in the books of Anil.

Prakash drew a bill for Rs. 4,000 on Anand on 1st May, 1976 for three months. This was for the amount which Anand owed to Prakash. Anand accepts the same and return it to Prakash who discounted at his bank for Rs. 3,900. On 1st Aug, 1976 Anand requested Prakash to renew the bill and Prakash agreed on the condition that Rs. 1,000 is paid immediately and Anand should accept the new bill for 3 months for the balance payable plus interest of Rs. 45. These arrangements were carried through. However, on 1st October, 1976, Anand retired his acceptance for Rs. 3, 035. Pass journal entries in the books of Anand

On 1st January, 1988 Vandana drew a bill for Rs. 6,000 for 2 months periods on Lata. Lata duly accepted the bill. On 4th January 1988 Vandana discounted the bill with her bank for Rs. 5850. However, on the due date the bill was dishonoured. Lata agreed to accept a new bill with an interest of Rs. 100 for a period of one month. The bill was duly met on the due date. Give the journal entries in the books of Vandana and show Vandana’s account in the books of Lata.

•Mukund owes (be obligated) Prakash Rs. 4000 for which Prakash draws a bill for 2 months on 1st February, 1989. Mukund accepts it and returns it to Prakash. On 4th March, 1989, Mukund approaches Prakash and request him to accept Rs. 1000 in cash and draw a fresh bill for 3 months for the balance plus interest @ 10% p.a. Prakash accepts the request and draw a bill accordingly which is accepted by Mukund. On 1st June 1989 Mukund retired his acceptance under discount of Rs. 30/-. Pass journal entries in the books of Prakash and prepare Prakash account in the ledger of Mukund.

Krishna accepted a bill for three months drawn by Rama for Rs. 4000. Rama discounted the bill with the bank at Rs. 3900. On the date of maturity, the bill was dishonoured. Rama paid noting charges for Rs. 20. Krishna paid half the amount for the bill and full amount of the noting charges and accepted a bill for the balance including interest of Rs. 50. The second bill was duly honoured. Pass necessary journal entries in the books of Rama and show Krishna’s account

•Ameet draws a bill for Rs. 7500 on Tushar for four months. Ameet discounts the bill with the bank at 8%p.a. On the due date Tushar requested Ameet to accept Rs. 4,700 (including Rs. 200 for interest) and to draw a bill for the balance of three months. Ameet agrees this proposal. Before the due date of the new bill Tushar retires the bill for Rs. 2960. Pass the journal entries in the books of Tushar and open Tushar’s account in the books of Ameet.

•Journalize the following transactions in the books of Maharaja.1.Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000 endorsed to Ayub has been dishonoured, noting charges amounted to Rs. 1502.Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying Rs. 400 in cash and accepting a fresh bill for the balance plus interest at 12% p.a. for 3 months.3.Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month before the due date at a discount of 12%p.a.4.Bank informs Maharaja as to the dishonour of Kasam’s acceptance for Rs. 2000 to Maharaja discounted with Bank noting charges Rs. 200.

•Journalise the following transactions in the books of Kamalakar. 1.Nisha informs Kamalakar that Shanti’s acceptance for Rs. 14,000 endorsed to Nisha has been dishonoured and noting charges have been paid Rs. 200. 2.Asha renews hare acceptance to Kamalakar for Rs. 12400 by paying Rs. 6000 in cash and accepting a new bill for the balance plus interest @ 12% p.a. for 3 months. 3.Devika’s acceptance to Kamalakar for Rs. 42000 is retired one month before its due date at a discount of 12% p.a. 4.The bank informs Kamalakar that Sindhu’s acceptance for Rs. 15000 has been dishonoured and it has paid noting charges Rs. 100. 5.Bank informs Kamalakar that Sangita’s acceptance for Rs. 12000 which was sent to bank for collection has been dishonoured.

•Journalise the following transactions in the books of Ranbir. 1.Sonam informs Ranbir that Salman’s acceptance for Rs. 3200 endorsed to Sonam has been dishonoured and the noting charges amounted to Rs. 80. 2.Ravindra renews his acceptance to Ranbir for Rs. 4,800 by paying Rs. 1800 in cash and accepted a fresh bill for the balance, plus interest @ 12% p.a for 2 months.3.Dilip’s acceptance to Ranbir for Rs 8000 is retired one month before the due date at a discount of 12% p.a. 4.The bank informs Ranbir that Shirin’s acceptance for Rs 5500 to Ranbir discounted with the bank earlier has been dishounred and the noting charges Rs. 100.

•Journalise the following transactions in the book’s of Bhaskar. 1.Suresh informed Bhaskar that Nishad’s acceptance for Rs. 2500 endorsed to Suresh has been dishonoured and noting charges amounted to Rs. 25.2.Rajesh renews his acceptance to Bhaskar for Rs. 7500 by paying Rs. 2500 in cash and accepting a fresh bill for the balance plus interest @ 10% p.a. for three months. 3.Mandar retired his acceptance to Bhaskar for Rs. 3,800 by paying Rs. 3750 in cash. 4.Bhaskar sent a bill of Dayaram for Rs. 5000 to the bank for collection. But the bank informed that the bill has been dishonoured by Dayaram. [March 2012]

•Journalise the following transactions in the books of Mr. Ashok Agrawal. 1.The bank informed Mr. Ashok Agrawal that Kamlesh’s acceptance for Rs. 12,000 sent to bank for collection had been honoured and bank charges debited were Rs. 60. 2.Discharged Dr. Ashok Agrawal’s acceptance to Mahesh for Rs. 15,250 by endorsing Prakash’s acceptance to Mr. Ashok Agrawal for Rs. 15,100. 3.Vishal renewed his acceptance to Mr. Ashok Agrawal for Rs. 11,200 by paying Rs. 6000 in cash and accepting a fresh bill for the balance plus interest @ 12% p.a. for three months. 4.Dinesh who had accepted Mr. Ashok Agrawal’s bill of Rs. 14,000 was declared bankrupt and only 45% of the amount due could be recovered from his estate.

•Journalise the following transactions in the books of Ashwin.

1.Bank informed that Sachin’s acceptance for Rs. 5,750 sent to bank for collection had been honoured and bank charges debited were Rs. 50. 2.Nitin renewed his acceptance for Rs. 7,200 by paying Rs. 2,200 in cash and accepting a new bill for the balance plus interest @8% p.a. for 3 months. 3.Discharged our acceptance to Pravin for Rs. 4,250 by endorsing Bhavin’s acceptance to us for Rs. 4,000.