Question

Kanika owes ₹ 26,000 to Mansi. Mansi drew a bill for ₹ 21,000 on Kanika for 3 months' period and received the balance of ₹ 5,000 by a crossed cheque. The bill was duly accepted and returned to Mansi. On the same day, Mansi endorsed Kanika's acceptance to Bansari. On the due date, Bansari informed Mansi that Kanika dishonoured her acceptance and noting charges 280 were paid. Mansi then drew a new bill for one month on Kanika including noting charges and interest ₹ 650. On the due date, Kanika honoured her acceptance by cheque.

Prepare:

1. Journal entries in the books of ‘Mansi’
2. ‘Mansi’ account in the books of ‘Kanika’

Answer 1

In the books of Mansi Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bills Receivable A/c ...Dr.		21,000	-
	Bank A/c ...Dr.		5,000	-
	To Kanika’s A/c		-	26,000
	(Being cheque and acceptance of bill received)
2.	Bansari’s A/c ...Dr.		21,000	-
	To Bills Receivable A/c		-	21,000
	(Being Kanika’s acceptance endorsed in favour of Bansari)
3.	Kanika A/c ...Dr.		21,280	-
	To Bansari’s A/c		-	21,280
	(Being endorsed bill dishonoured)
4.	Kanika A/c ...Dr.		650	-
	To Interest A/c		-	650
	(Being interest due)
5.	Bills Receivable A/c ...Dr.		21,930	-
	To Kanika A/c		-	21,930
	(Being new bill drawn along with noting charges and interest and acceptance received)
6.	Bank A/c ...Dr.		21,930	-
	To Bills Receivable A/c		-	21,930
	(Being Kanika’s acceptance duly honoured on the due date)

 

Dr.	In the books of Kanika Mansi account						Cr.
Date	Particulars	J.F.	Amount (₹)	Date	Particulars	J.F.	Amount (₹)
	To Bank A/c		5,000		By Balance b/d		26,000
	To Bills Payable A/c		21,000		By Bills Payable A/c		21,000
	To Bills Payable A/c		21,930		By Noting Charges A/c		280
					By Interest A/c		650
			47,930				47,930