Question

Uday purchased goods from Shankar on credit for  ₹ 35,000 at 10 % Trade discount. Uday paid ₹1,500 immediately and for the balance accepted a bill for 3 months. Before the due date, Uday approached Shankar with a request to renew the bill. Shankar agreed but with condition that Uday should accept a new bill for 3 months including interest at 12 % p.a.

Give Journal Entries in the Books of Shankar.

Answer 1

In the books of Shankar Journal Entries
Date	Particulars	L.F	Debit (₹)	Credit (₹)
1	Uday’s A/c Dr		31,500
	To Sales A/c			31,500
	(Being goods sold on credit @ 10 % trade discount)
2	Cash A/c Dr.		1,500
	To Uday’s A/c			1,500
	(Being cash received from Uday)
3	Bills Receivable A/c Dr.		30,000
	To Uday’s A/c			30,000
	(Being bill drawn and acceptance received)
4	Uday’s A/c Dr.		30,000
	To Bills Receivable A/c			30,000
	(Being the bill cancelled at the request of Uday)
5	Uday’s A/c Dr.		900
	To Interest A/c			900
	(Being interest amount due)
6	New Bills Receivable A/c Dr		30,900
	To Uday’s A/c			30,900
	(Being new bill drawn with interest and acceptance received)
			124800	124800

working Note :

I =`"PRN"/100 = 30,000 xx 3/12 xx 12/100` = ₹ 900