On 1st February, 2016, Ravi sold goods to Mohan for Rs. 18,000; Rs. 3,000 were paid by Mohan immediately and for the balance he accepted three months bill drawn upon him by Ravi. On the date of maturity of the bill Mohan requested Ravi to cancel the old bill and draw a new bill upon him for a period of 2 months. He further agreed to pay interest in cash to Ravi 12 % per annum. Ravi agreed to Mohan's request and cancelled the old bill and drew a new bill. The new bill was met on maturity by Mohan. Pass necessary journal entries in the books of Ravi.

On 1st February, 2016, Ravi sold goods to Mohan for Rs. 18,000; Rs. 3,

1.	On 1st February, 2016, Ravi sold goods to Mohan for Rs. 18,000; Rs. 3,000 were paid by Mohan immediately and for the balance he accepted three months bill drawn upon him by Ravi. On the date of maturity of the bill Mohan requested Ravi to cancel the old bill and draw a new bill upon him for a period of 2 months. He further agreed to pay interest in cash to Ravi 12 % per annum. Ravi agreed to Mohan's request and cancelled the old bill and drew a new bill. The new bill was met on maturity by Mohan. Pass necessary journal entries in the books of Ravi.
Answer» On 1st February, 2016, Ravi sold goods to Mohan for Rs. 18,000; Rs. 3,000 were paid by Mohan immediately and for the balance he accepted three months bill drawn upon him by Ravi. On the date of maturity of the bill Mohan requested Ravi to cancel the old bill and draw a new bill upon him for a period of 2 months. He further agreed to pay interest in cash to Ravi 12 % per annum. Ravi agreed to Mohan's request and cancelled the old bill and drew a new bill. The new bill was met on maturity by Mohan. Pass necessary journal entries in the books of Ravi.