On 1st January 2013, Sankar sold goods worth ₹ 20,000 to Bhaskar on credit and drew a bill for 3 months for the same amount. Bhaskar accepted the bill and returned it to Sankar. On the same day Sankar discounted the bill with his bank at 10% per annum. On the due date, the bill i

Question

On 1st January 2013, Sankar sold goods worth ₹ 20,000 to Bhaskar on credit and drew a bill for 3 months for the same amount. Bhaskar accepted the bill and returned it to Sankar. On the same day Sankar discounted the bill with his bank at 10% per annum. On the due date, the bill is honoured. Pass Journal entries in the books of Sankar.

Accepted Answer

>

> [!TLDR]
> Sankar is the drawer. He sells goods on credit, receives Bhaskar's acceptance as a Bills Receivable, and at once discounts it with his bank. Discount = 20,000 x 10% x 3/12 = Rs 500, so the bank credits Rs 19,500. Because the bill was discounted, the bank (not Sankar) collects it on maturity; since it is honoured, no further entry is needed in Sankar's books.
>
> **Discount calculation:** 20,000 x 10/100 x 3/12 = Rs 500. Net cash received = 20,000 − 500 = Rs 19,500.
>
> **Journal in the books of Sankar**
>
> | Date | Particulars | L.F. | Dr (Rs) | Cr (Rs) |
> | --- | --- | --- | --- | --- |
> | 2013 Jan 1 | Bhaskar A/c ........ Dr | | 20,000 | |
> | |   To Sales A/c | | | 20,000 |
> | | (Goods sold to Bhaskar on credit) | | | |
> | Jan 1 | Bills Receivable A/c ........ Dr | | 20,000 | |
> | |   To Bhaskar A/c | | | 20,000 |
> | | (Bill drawn for 3 months, accepted by Bhaskar) | | | |
> | Jan 1 | Bank A/c ........ Dr | | 19,500 | |
> | | Discount A/c ........ Dr | | 500 | |
> | |   To Bills Receivable A/c | | | 20,000 |
> | | (Bill discounted with bank at 10% p.a. for 3 months) | | | |
> | Apr 4 (due date) | No entry | | — | — | …

Date	Particulars	Dr (₹)	Cr (₹)
2022 Jun 1	Sivam A/c Dr	9,000
	To Sales A/c		9,000
	(Being goods sold to Sivam on credit)
Jun 1	Bills Receivable A/c Dr	9,000
	To Sivam A/c		9,000
	(Being Sivam's 2-month acceptance received)
Jul 1	Sundaram A/c Dr	9,000

Date	Particulars	Debit (Rs)	Credit (Rs)
2017 Jan 1	Sujatha A/c ... Dr	8,000
	To Sales A/c		8,000
	(Being goods sold to Sujatha)
2017 Jan 1	Bills Receivable A/c ... Dr	8,000
	To Sujatha A/c		8,000

Date	Particulars	Debit (Rs.)	Credit (Rs.)
2013 Jun 1	Sivam A/c ... Dr	9,000
	To Sales A/c		9,000
	(Being goods sold to Sivam on credit)
2013 Jun 1	Bills Receivable A/c ... Dr	9,000
	To Sivam A/c		9,000
	(Being Sivam's acceptance of the 2-month bill received)
2013 Jul 1	Sundaram A/c ... Dr	9,000
	To Bills Receivable A/c		9,000
	(Being the bill endorsed to the creditor Sundaram)

Date	Particulars	Dr (Rs)	Cr (Rs)
2013 Jan 1	Bhaskar A/c ........ Dr	20,000
	To Sales A/c		20,000
	(Goods sold to Bhaskar on credit)
Jan 1	Bills Receivable A/c ........ Dr	20,000
	To Bhaskar A/c		20,000
	(Bill drawn for 3 months, accepted by Bhaskar)
Jan 1	Bank A/c ........ Dr	19,500
	Discount A/c ........ Dr	500
	To Bills Receivable A/c		20,000
	(Bill discounted with bank at 10% p.a. for 3 months)
Apr 4 (due date)	No entry	—	—

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