What is Noting of a bill of exchange.

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.

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.

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.

What is retirement of a bill of exchange?

Vishal sold goods for `7,000 to Manju on Jan 05, 2016 and drew upon her a bill of exchange payable after 2 months. Manju accepted Vishal’s draft and handed over the same to Vishal after acceptance. Vishal immediately discounted the bill with his bank@\(12\%\) p.a. On the due date Manju met her acceptance.
Journalise the above transactions in the books of Vishal and Manju.

Name the parties to a promissory note

What is meant by acceptance of a bill of exchange?

Give the meaning of rebate.

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 Jan 01, 2016, Shankar purchased goods from Parvati for ` 8,000 and immediately drew a promissory note in favour of Parvati payable after 3 months. On the date of maturity of the promissory note, the Government of India declared holiday under the Negotiable Instrument Act 1881. Since, Parvati was unaware about the provision of the law regarding the date of maturity of the bill, she handed over the bill to her lawyer, who duly presented the bill and received the payment. The amount of the bill was handed over by the lawyer to Parvati immediately. Recore the necessary Journal entries in the books of Parvati and Shankar.

Nikhil sold goods for `23,000 to Akhil on Dec. 01, 2017. He drew upon Akhil a bill of exchange for the same amount payable after 2 months. Akhil accepted the bill and sent it back to Nikhil. Nikhil discounted the bill immediately with his bank @\(12\%\) p.a. On the due date Akhil dishonoured the bill of exchange and the bank paid `100 as noting charges. Akhil requested Nikhil to draw a new bill upon him with interest @\(10\%\) p.a. which he agreed. The new bill was payable after two months. A week before the maturity of the second bill Akhil requested Nikhil to cancel the second bill. He further requested to accept `10,000 in cash immediately and drew a third bill upon him including interest of `500. Nikhil agreed to Akhil’s request. The third bill was payable after one month. Akhil met the third bill on its maturity. record the necessary journal entries in the books of Nikhil and Akhil and also prepare Akhil’s account in the books of Nikhil and Nikhil’s account in the books of Akhil.

Give the performa of a Bills Receivable Book.

On Jan 01, 2016 Rao sold goods `10,000 to Reddy. Half of the payment was made immediately and for the remaining half Rao drew a bill of exchange upon Reddy payable after 30 days. Reddy accepted the bill and returned it to Rao. On the due date Rao presented the bill to Reddy and received the payment.
Journalise the above transactions in the books Rao and prepare of Rao’s account in the books of Reddy.

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.

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.

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?

Name any two types of commonly used negotiable instruments.