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On 1st January, 2016, V sold goods worth Rs. 36,000 to S and drew upon the latter bills of exchange for the same amount payable afte two months. S accepted V's draft and returned the same to V after acceptance. V endorsed the bill immediately in favour of his creditor G. Five days before the maturity of the bill S requested V to cancel the bill since he was in short of funds. He further requested to draw a new bill upon him including interest of Rs. 400. V accepted S's request. V took the bill from G by making the payment to him in cash and cancelled the same. Then he drew a new bill upon S as agreed. The new bill was payable after one month. The new bill was duly met by S on maturity. Record the necessary journal entries in the books of V. |
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Answer» On 1st January, 2016, V sold goods worth Rs. 36,000 to S and drew upon the latter bills of exchange for the same amount payable afte two months. S accepted V's draft and returned the same to V after acceptance. V endorsed the bill immediately in favour of his creditor G. Five days before the maturity of the bill S requested V to cancel the bill since he was in short of funds. He further requested to draw a new bill upon him including interest of Rs. 400. V accepted S's request. V took the bill from G by making the payment to him in cash and cancelled the same. Then he drew a new bill upon S as agreed. The new bill was payable after one month. The new bill was duly met by S on maturity. |
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