On Jan. 01, 2017 Harsh accepted a months bill for ` 10,000 drawn on him by tanu for latter’s benefit. Tanu discounted the bill on same day @ \(8\%\) p.a On the due date tanu sent a cheque to Harsh for honour the bill. Harsh duly honoured his acceptance.
Record the journal entries in the Books of Tanu and Harsh.

What is meant by renewal of a bill of exchange?

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 endorsed to his creditor Ganeshan.

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

What is Noting of a bill of exchange.

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.

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

Lilly sold goods to Methew on 1.3.2017 for ` 12,000 and drew upon Methew a bill of exchange for the same amount payable after two months. Lilly immediately discounted the bill with her bank at \(9\%\) p.a. The maturity date of the bill was a non business day (holiday), therefore, Lilly had to present the bill as per the provisions of the Indian Instruments Act.1881. The bill was dishonoured by Methew and Lilly paid ` 45 as noting charges. Methew settled the claim of Lilly five days after the disonour of the bill by a cheque, whch includes interest @ \(12\%\) for the term of the bill.
Journalise the above transactions in the books of Lilly and Methew and prepare Mathew’s account in the books of Lilly and Lilly’s account in the books of Mathew.

What is meant by acceptance of a bill of exchange?

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 discounted by Ravinderan immediately with his bank @ \(6\%\) p.a.

On Feb. 02, 2017, Verma purchased from Sharma goods for `17,500. Verma paid `2,500 immediately and for the balance gave a promissory note to Sharma payable after 60 days. Sharma immediately endorsed the promissory note in favour of his creditor.
Gupta for the full settlement of a debt of ` 15,400. On the due date of the bill Gupta presented the bill to Verma which the latter dishonoured and Gupta paid `5,000 noting charges. On the same date Gupta informed Sharma about the dishonour of the bill. Sharma settled his debt to Gupta by cheque for ` 15,500 which includes noting charges and interest. Verma settled Sharma’s claim by cheque for the same amount.
Record the necessary journal entries is the books of Sharma, Gupta and Verma for the above transaction and prepare Verma’s and Gupta’s accounts in the books of Sharma. Sharma’s account in the books of Verma. And also Sharma’s account in the books of Gupta.

Name the parties to a promissory note

Distinguish between bill of exchange and promissory note.

On Jan 01, 2016 Neha sold goods for `20,000 to Muskan and drew upon her a bill of exchange payable after two months. One month before the maturity of the bill Muskan approached Neha to accept the payment against the bill at a rebate @ \(12\%\) p.a. Neha agreed to the request of Muskan and Muskan retired the bill under the agreed rate of rebate. Journalise the above transaction in the books of Neha and Muskan.

A bill of exchange must contain “an unconditional promise to pay” Do you agree with a statement?

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 retained by Darshan till the date of its maturity.

What is meant by dishonour of a bill of exchange?

On Jan 15, 2016 Raghu sold goods worth ` 35,000 to Devendra and drew upto the latter three bills of exchanges. The first bill was for ` 5,000 payable after one month, the second bill was for `20,000 payable after three months and third bill for balance amount for 4 months. Raghu endorsed the first bill in favour of his creditor Dewan in full settlement of a debt of `5,200. The second bill was discounted by Raghu @ \(6\%\) p.a. and the third bill was retained by Raghu till the date of maturity. Devendra dishonoured the bill on maturity and the bank paid ` 30 as noting charges. Four days before the maturity of the third bill Raghu, sent the same for collection to his bank. The third bill was also dishonored by Devendra and the bank paid `200 as noting charges. Five days after the dishonour of the bill Devendra paid the entire amount due to Raghu along with interest `1,000 for this purpose Devendra obtained a short term loan from his bank.
You are requested to record the necessary journal entries in the books of Raghu Devendra and Dewan and also prepare Devendra’s account in Raghu’s books and Raghu’s account in Devendra’s account.

State any four essential features of bill of exchange.

On Jan 01, 2017 Vibha sold goods worth `18,000 to Sudha and drew upon the latter a bill of exchange for the same amount payable after two months. Sudha accepted Vibha’s draft and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel the bill since she was short of funds. She further requested to draw a new bill upon her including interest of ` 200. Vibha accepted Sudha’s request. Vibha took the bill from Geeta by making the payment to her in cash and cancelled the same. Then she drew a new bill upon Sudha as agreed. The new bill was payable after one month. The new bill was duly met by Sudha on maturity. Record the necessary journal entries in the books of Vibha.