Q.On 1st June 2026, Deepak sold goods to Naresh for Rs 25,000. Deepak drew a bill for 2 months, which Naresh accepted. Deepak sent the bill to his bank for collection. On the due date, the bank collected the amount in full and credited Deepak's account, charging Rs 100 as collection charges. Give journal entries in the books of both Deepak (drawer) and Naresh (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 C …