Q.On 1st May 2026, Anil sold goods to Vijay for Rs 10,000. Anil drew a bill for 3 months which Vijay accepted. On the same day, Anil endorsed the bill to his own creditor, Mohan, in full settlement of Rs 10,000 due to him. Give journal entries in the books of both Anil (drawer) and Vijay (drawee), assuming the bill is honoured on the due date.

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 C …