Q.On 1st January 2026, Ram sold goods to Shyam for Rs 20,000. On the same day, Ram drew a bill on Shyam for the amount, payable 3 months after date, which Shyam accepted and returned to Ram. Ram retained the bill till maturity. On the due date, Shyam honoured the bill. Give journal entries in the books of both Ram (drawer) and Shyam (drawee).

After a bill is drawn (Bills Receivable A/c Dr, To Drawee's A/c, in the drawer's books; Drawer's A/c Dr, To Bills Payable A/c, in the drawee's books), the holder has four options. Retain till maturity: on honour, Bank/Cash A/c Dr To Bills Receivable A/c (drawer) and Bills Payable A/c Dr To Bank/Cash A/c (drawee). Discount with a bank: drawer records Bank A/c Dr (net) + Discount A/c Dr (charge), To Bills Receivable A/c (full amount); the drawee's entry on the due date is unaffected — Bills Payable A/c Dr To Bank A/c. Endorse to a creditor: drawer records Creditor's A/c Dr To Bills Receivable A/c (settling their own debt); again no effect on the drawee's entry. Send for collection: drawer records Bills Sent for Collection A/c Dr To Bills Receivable A/c, then on collection, Bank A/c Dr (net) + Bank Charges A/c Dr, To Bills Sent for Collection A/c; the drawee's entry is unaffected. In every one of these four options, the drawee's own entries never change — the drawee simply pays whoever presents the bill on the due date.