Ravi sold goods for ` 40,000 to Sudershan on Feb 13, 2016. He drew four bills of exchange upon Sudershan. The first bill was for `5,000 payable after one month. The second bill was for ` 10,000 payable after 40 days; the third bill was for ` 12,000 payable after three months and fourth bill was for the balance amount payable after 19 days. Sudershan accepted all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at \(6\%\) p.a. He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of ` 10,200. The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of the fourth bill, Ravi sent the bill to his bank for collection. All the four bills were dishounoured by Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonour of each bill along with interest @ \(12\%\) p.a. for the terms of the bills.
You are requested to record the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above transaction. Also prepare Sudershan’s account and Mustaq’s account in the books of Ravi.

On Feb 01, 2016, John purchased goods for `15,000 from Jimmi. He immediately made a payment of `5,000 by cheque and for the balance accepted the bill of exchange drawn upon him by Jimmi. The bill of exchange was payable after 40 days. Five days before the maturity of the bill, Jimmi sent the same to his bank for collection. The bank duly presented the bill to John on the due date who met the bill. The bank informed the same to Jimmi.
Prepare John’s account in the books of Jimmi and Jimmi account in the books of John.

Give the meaning of rebate.

Viaml purchased goods ` 25,000 from Kamal on Jan 15, 2016 and accepted a bill of exchange drawn upon him by Kamal payable after two months. On the date of the maturity the bill was duly presented for payment. Vimal dishonoured the bill.
record the necessary journal entries in the books of Kamal and Vimal when.
The bill was endorsed by Kamal in favour of his creditor Sharad.

Narayanan purchased goods for `25,000 from Ravinderan on Feb. 01, 2016. Ravinderan drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the due date Narayanan dishonoured his acceptance.
Record the necessary journal entries in the books of Ravinderan and Narayanan in following cases:
When the bill was sent by Ravinderan to his bank for collection a few days before it maturity.

What is meant by dishonour of a bill of exchange?

Briefly explain the purpose and benefits of retiring a bill of exchange to the debtor and the creditor.

Asha sold goods worth `19,000 to Nisha on March 02, 2017. `4,000 were paid by Nisha immediately and for the balance she accepted a bill of exchange drawn upon her by Asha payable after three months. Asha discounted the bill immediately with her bank. On the due date Nisha dishonoured the bill and the bank paid `30 as noting charges.
Record the necessary journal entries in the books of Asha and Nisha.

What is meant by renewal of a bill of exchange?

Abdulla sold goods to Tahir on Jan 17, 2017 for ` 18,000. He drew a bill of exchange for the same amount on Tahir for 45 days. On the same date Tahir accepted the bill and returned it to Abdulla. On the due date Abdulla presented the bill to Tahir which was dishonoured. Abdulla paid `40 as noting charges. Five days after the dishonour of his acceptance Tahir settled his debt by making a payment of `18,700 including interest and noting charges.
Record the necessary journal entries in the books of Abdulla and Tahir. Also prepare Tahir’s account in the books of Abdulla and Abdulla’s account in the books of Tahir.

Briefly explain the benefits of maintaining a Bills Payable Book and state how is its posting is done in the ledger?

Darshan sold goods for ` 40,000 to Varun on 8.1.2016 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances. When three days before its maturity, the bill was sent by Darshan to his bank for collection.

State the three parties involved in a bill of exchange.

On Feb. 14, 2017 Rashmi sold good `7,500 to Alka. Alka paid `500 in cash and for the bank balance accepted a bill of exchange drawn upon her by Rashmi payable after two months. On Apr.10, 2017 Alka approached Rashmi to cancel the bill since she was short of funds. She further requested Rashmi to accept `2,000 in cash and draw a new bill for the balance including interest ` 500. Rashmi accepted Alka’s request and drew a new bill for the amount due payable after 2 months. The bill was accepted by Alka. The new bill was duly met by Alka on maturity.
Record the necessary journal entries in the books of Rashmi and Alka and prepared Alka’s account in the books of Rashmi’s and Rashmi’s account in the books of Alka’s

Darshan sold goods for ` 40,000 to Varun on 8.1.2016 and drew upon him a bill of exchange payable after two months. Varun accepted the bill and returned the same to Darshan. On the due date the bill was met by Varun. Record the necessary Journal entries in the books of Darshan and Varun in the following circumstances. When the bill was endorsed immediately by Darshan in favour of his creditor Suresh.

Distinguish between bill of exchange and promissory note.

Narayanan purchased goods for `25,000 from Ravinderan on Feb. 01, 2016. Ravinderan drew upon Narayanan a bill of exchange for the same amount payable after 30 days. On the due date Narayanan dishonoured his acceptance.
Record the necessary journal entries in the books of Ravinderan and Narayanan in following cases:
When the bill was retained by Ravinderan with him till the date of its maturity.

State any four essential features of bill of exchange.

Kapil purchased goods for ` 21,000 from Gaurav on 1.2.2017 and accepted a bill of exchange drawn by Gaurav for the same amount. The bill was payable after one month. On 25.2.2017 Gaurav sent the bill to his bank for collection. The bill was duly presented by the bank. Kapil dishonoured the bill and the bank paid `100 as noting charges.
Record the necessary journal entries for the above transactions in the books of Kapil and Gourav.

Bansal Traders allow a trade discount of \(10\%\) on the list price of the goods purchased from them. Mohan traders, who runs a retail shop made the following purchases from Bansal Traders.
Date Amount (`)
Dec. 21, 2016 1,000
Dec. 26, 2016 1,200
Dec. 18, 2016 2,000
Dec. 31, 2016 5,000
For all the purchases Mohan Traders drew promissory note in favour of Bansal Traders payable after 30 days. The promissory note for the sale of Dec. 21, 2016 was retained by Bansal Traders with them till the date of its maturity. The promissory note drawn on 26.12.2016 was discounted by Bansal Traders from their bank at \(12\%\) p.a. The promissory note drawn on Dec. 28, 2016 was endorsed by Bansal Traders in favour of their creditor Dream Soaps in full settlement of a purchase amounting to ` 1,900. On 25.1.2017 Bansal Traders sent the promissory note drawn on Dec. 31, 2016 to their bank for collection. All the promissory notes were met by Mohan Traders. Record the necessary journal entries for the above transactions in the books of Bansal Traders and Mohan Traders and prepare Mohan Traders account in the books of Bansal Traders and Bansal Traders account in the books of Mohan Traders.