Q.On 1st September 2026, Meena sold goods to Naina for Rs 18,000. Meena drew a bill for 3 months, which Naina accepted, and Meena retained it till maturity. One month before the due date, Naina approached Meena and paid the full bill amount in cash, in return for which Meena allowed a rebate of 12% p.a. for the unexpired one month. Give journal entries for the retirement, in the books of both Meena (drawer) and Naina (drawee).

Dishonour occurs when the drawee fails to pay on the due date; the debt reverts to an ordinary personal account, increased by any noting charges (the Notary's fee for certifying the dishonour, recoverable from the defaulting drawee). Drawer: Drawee's A/c Dr (bill amount + noting charges), To Bills Receivable A/c (if retained) or To Bank A/c (if discounted/collected — the bank recovers its payment plus noting charges from the drawer). Drawee: Bills Payable A/c Dr + Noting Charges A/c Dr, To Drawer's A/c. Renewal: before the due date, the drawee requests cancellation of the old bill and a fresh bill (usually plus interest) for a later date — three-step entries (cancel old bill, charge/record interest, record new bill) mirrored in both parties' …