Table of Content

Problems and Solutions of Journal Entries

Solution of Journal Entries with Problems of Account for class 11 and Bachelor Level Students. It is a complete solution to possible Questions that may be asked in the board examination.  

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Next Solution: Solution of Subsidiary Book 

Problem 1:

Consider the following transaction

January 1: Started business with cash of 50000, Furniture of 25000, and stock of 20000

January 5: Purchased goods costing 200000

January 7: Purchased goods on credit from Mr. Bhatta 50000

January 9: Purchased goods for cash 50000 and credit for 10000

January 10: Sold goods for cash 150000

January 11: Sold goods to Mr. Shrestha 35000

January 14: Sold goods on credit 7000

January 18: Sold goods (costing 5000) for cash 2000 and on credit to Mr. Acharya 3500

 Required: Journal Entries

Journal Entries

Date

Particular

L. F.

Debit

Credit

Jan 1:

Cash a/c  Dr.

 

50000

 

Furniture a/c Dr.

 

25000

 

Stock a/c Dr.

 

20000

 

   To capital a/c

 

 

95000

(Being started business with cash, furniture, and stock)

 

 

 

Jan 5:

Purchase a/c Dr.

 

200000

 

    To cash a/c

 

 

200000

(Being purchased goods on cash)

 

 

 

Jan 7:

Purchase a/c Dr.

 

50000

 

    To Mr. Bhatta a/c

 

 

50000

(Being purchased goods on credit from Mr. Bhatta)

 

 

 

Jan 9:

Purchased a/c Dr.

 

60000

 

    To cash a/c

 

 

50000

    To creditors a/c

 

 

10000

(Being purchased goods on cash and credit)

 

 

 

Jan 10:

Cash a/c Dr.

 

150000

 

   To sales a/c

(Being sold goods on cash)

 

 

150000

Jan 11:

Mr. Shrestha a/c Dr.

 

35000

 

   To sales a/c

 

 

35000

(Being sold goods on credit to Mr. Shrestha)

 

 

 

Jan 14:

Debtors a/c Dr.

 

7000

 

   To sales a/c

 

 

7000

(Being sold goods on credit)

 

 

 

Jan 18:

Cash a/c Dr.

 

2000

 

Mr. Acharya a/c Dr.

 

3500

 

    To sales a/c

(Being sold goods for cash and on credit to Mr. Acharya)

 

 

5500

 

Total

 

602500

602500


Problem 2:

Journalized the transactions given below in the books of Makalu Traders.

2019

April 1. Makalu started the business with 200000. Makalu opens an account with bank deposits of 180000

                2. Makalu Purchased furniture 8500 and a computer 2500. Payment made by cheque

                3. Goods purchased from M / s Basu & Co. for cash of 15000 and on credit of 30000

                4. Goods sold for cash 25000 to M / s Arbind & Co.

                5. Paid to M/s Basu for full settlement and allowed a discount of 1000

                6. Goods sold for cash 10000 and on credit 25000 to M/s Asha Traders.

                7. Received a cheque for 24500 from M/s Asha Traders for full settlement

                8. Received a bill for two table fans, 4400 from M/ s Ugratara Electrics goods supplier.

                9. One fan was stolen

Journal Entries

Date

Particular

L.F.

Debit

Credit

2064

Cash a/c Dr.

 

200000

 

April 1

   To capital a/c

 

200000

 

(Being started business with cash)

 

 

1

Bank a/c Dr

 

180000

 

 

   To Cash a/c

 

 

180000

 

(Being cash deposited in the bank)

 

 

 

2

Furniture a/c Dr

 

8500

 

 

Office Equipment a/c Dr

 

25000

 

 

    To bank a/c

 

 

33500

 

(Being purchased furniture and computer and payment made through cheque)

 

 

 

3

Purchased a/c Dr

 

45000

 

 

   To Cash a/c

 

 

15000

 

   To M/s Basu & Co. a/c

 

 

30000

 

(Being goods purchased for cash and on credit from M/s Basu and CO

 

 

 

4

Cash a/c Dr

 

25000

 

 

   To Sales a/c

 

 

25000

 

(Being goods sold for cash to M/s Arbind & Co.)

 

 

 

5.

M/s Basu a/c Dr

 

30000

 

 

   To Cash a/c

 

 

29000

 

    To Discount a/c

 

 

1000

 

(Being paid cash to M/s Basu for full settlement and received discount)

 

 

 

6.

Cash a/c Dr.

 

10000

 

 

M/S Asha Traders a/c Dr

 

25000

 

 

    To Sales a/c

 

 

35000

 

(Being goods sold to M/s Asha Traders for cash and on credit)

 

 

 

7.

Cash a/c Dr.

 

24500

 

 

Discount a/c Dr.

 

500

 

 

   To M/S Asha Traders a/c

 

 

25000

 

(Being a cheque received from M/s Asha Traders for full settlement)

 

 

 

8.

Office Equipment a/c

 

4400

 

 

   To M/s Ugratara Electrics Suppliers

 

 

4400

 

(Being purchased two table fans from M/s. Ugratara Electrics Goods Suppliers on credit)

 

 

 

9.

Loss by theft a/c

 

 

 

 

   To Office Equipment a/c

 

 

 

 

(Being stolen of one table fan)

 

 

 

 

Total

 

580100

580100


Problem 3:

The following transactions are given 

May      1: Business started with cash of 15000

2: Goods purchased for cash 5000

3: Purchased goods from Mr. Agrawal 1000

5: Paid to Mr. Agrawal 1000

9: Paid for postage 120

11: Deposited into bank 7000

14: Sold goods on credit to Ram 1500

15: Received cash from Ram 1000

19: Paid telephone charges of 60

24: Purchased Furniture 30000

29: Cash sales 900

30: Received from Ram 500

31: Paid salaries for the month of 150

31: Purchase government securities 500

31: Paid for advertising by cheque 150

Required:  Journal Entries

Journal Entries

Date

Particular

L.F.

Debit

Credit

May 1

Cash a/c Dr.

 

15000

 

 

   To capital a/c

 

15000

 

(Being started business with cash)

 

 

2

Cash a/c Dr.

5000

 

 

   To sales a/c

 

5000

 

(Being goods purchased for cash)

 

 

3

Purchased a/c Dr.

1000

 

 

   To Mr. Agrawal a/c

 

1000

 

(Being purchased goods from Agrawal)

 

 

5

Mr. Agrawal a/c Dr.

1000

 

 

   To cash a/c

 

1000

 

(Being cash paid to Mr. Agrawal)

 

 

9

Postage a/c Dr.

120

 

 

   To cash a/c

 

120

 

(Being paid for postage)

 

 

11

Bank a/c Dr.

7000

 

 

   To cash a/c

 

7000

 

(Being cash deposited into the bank)

 

 

14

Ram a/c Dr.

1500

 

 

   To sales a/c

 

1500

 

(Being sold goods on credit from Ram)

 

 

15

Cash a/c Dr.

1000

 

 

   To Ram a/c

 

1000

 

(Being cash received from Ram)

 

 

19

Telephone expenses a/c Dr.

60

 

 

   To cash a/c

 

60

 

(Being cash paid for telephone expenses)

 

 

24

Furniture a/c Dr.

30000

 

 

   To cash a/c

 

30000

 

(Being purchased furniture)

 

 

29

Cash a/c Dr.

900

 

 

   To sales a/c

 

900

 

(Being gold sold for cash)

 

 

30

Ram a/c Dr.

500

 

 

   To cash a/c

 

500

 

(Being cash received for cash)

 

 

31

Salaries a/c Dr.

150

 

 

   To cash a/c

 

150

 

(Being the payment of salaries)

 

 

31

Government securities a/c

500

 

 

   To cash a/c

 

500

 

(Being government securities purchased)

 

 

31

Advertising a/c Dr.

150

 

 

   To Bank a/c

 

150

 

(Being paid for advertising by cheque)

 

 

 

Total

 

77380


77380


Problem 4:

Pass the journal entries for the following transaction

Aug. 1

Started business with cash

190000

Aug. 3

Bought goods: For cash

5000

 

                           From Karan

5000

 

                           From Janak

5000

Aug. 10

Paid wages

100

 

Paid Karan

2000

 

Paid Janak

5000

Aug. 14

Sold goods for cash (Cost 5000)

6000

Aug. 16

Sold goods to Rabin (Cost 3000)

2500

Aug. 18

Sold goods to Gopal on credit

3500

Aug. 20

Cash received from Rabin in full settlement

2400

Aug. 31

Bought furniture

1000

 

Paid for repairs

250

 Journal Entries

Date

Particular

L. F.

Debit

Credit

Aug. 1

Cash a/c Dr.

 

190000

 

 

   To capital a/c

 

 

190000

 

(Being started business with cash)

 

 

 

Aug. 3

Purchased a/c Dr.

 

15000

 

 

    To cash a/c

 

 

5000

 

    To Karan a/c

 

 

5000

 

    To Janak a/c

 

 

5000

 

(Being purchased goods on cash and from Karan, and Janak on credit)

 

 

 

Aug. 10

Wages a/c Dr.

 

100

 

 

Karan a/c Dr.

 

2000

 

 

Janak a/c Dr.

 

5000

 

 

    To cash a/c

 

 

7100

 

(Being cash paid for Wages, Karan, and Janak)

 

 

 

Aug. 14

Cash a/c Dr.

 

6000

 

 

   To sales a/c

 

 

6000

 

(Being sales goods on cash)

 

 

 

Aug. 16

Rabin a/c Dr.

 

2500

 

 

    To sales a/c

 

 

2500

 

(Being sold goods to Rabin)

 

 

 

Aug. 18

Gopal a/c Dr.

 

3500

 

 

   To sales a/c

 

 

3500

 

(Being goods sold to Gopal on credit)

 

 

 

Aug. 20

Cash a/c Dr.

 

2400

 

 

Discount a/c Dr.

 

100

 

 

    To Rabin a/c

 

 

2500

 

(Being cash received from Rabin and discount allowed to him)

 

 

 

Aug. 31

Furniture a/c Dr.

 

1000

 

 

Repairs a/c Dr.

 

250

 

 

   To cash a/c

 

 

1250

 

(Being cash paid for furniture and repair)

 

 

 

 

Total

 

227850

227850


Problem 5:

Journalize the following transactions:

a.       Commencement of business with cash 50000

b.       Purchased goods on credit from Kiran for 25000

c.       Received 975 from debtor Mrs. Rita and allowed a discount of 25

d.       A piece of furniture costing 1500 has been sold for 1200 incurring a loss of 300

e.       Received goods returned by Mr. Bharat as being not according to order 1000

f.        Paid installation charge of 900

g.       Amount due from Hira 1000 has been written off as bad debts.

h.       Unused furniture was disposed of for 2700

i.         Allowed discount of 500 to Mr. Varun

j.         Received a loan of 3000 from a bank.

Journal Entries

Date

Particular

L.F.

Debit

Credit

a.

Cash a/c Dr.

 

50000

 

 

   To capital a/c

 

50000

 

(Being commencement of business with cash)

 

 

b.

Purchase a/c Dr.

 

25000

 

 

   To Kiran a/c

 

 

25000

 

(Being purchased goods on credit from Kiran)

 

 

 

c.

Cash a/c Dr.

 

975

 

 

Discount a/c Dr.

 

25

 

 

   To Mrs. Rita a/c

 

 

1000

 

(Being cash received from Mrs. Rita and allowed a discount)

 

 

 

d.

Cash a/c Dr.

 

1200

 

 

Loss on sales of furniture a/c

 

300

 

 

   To furniture a/c

 

 

1500

 

(Being furniture has been sold incurring a loss)

 

 

 

e.

Bharat a/c Dr.

 

1000

 

 

  To purchase return a/c

 

 

1000

 

(Being goods returned by Mr. Bharat as being not according to order)

 

 

 

f.

Installation charged a/c Dr.

 

900

 

 

   To cash a/c

 

 

900

 

(Being paid installation charge)

 

 

 

g.

Bad debts a/c Dr.

 

1000

 

 

   To Hira a/c

 

 

1000

 

(Being amount due from Hira has been written off as bad debts.)

 

 

 

h.

Cash a/c Dr.

 

2700

 

 

  To furniture a/c

 

 

2700

 

(Being unused furniture were disposed)

 

 

 

i

Discount a/c Dr.

 

500

 

 

   To Mr. Varun a/c

 

 

500

 

(Being discount allowed to Mr. Varun)

 

 

 

j.

Cash a/c Dr.

 

3000

 

 

  To loan a/c

 

 

3000

 

(Being received loan from a bank)

 

 

 

 

Total

 

86600

86600


 

Problem 6:

Give journal entries for the following:

a.       Goods worth 1000 were lost by the accident, and the insurance company admitted no claim.

b.       Peon stole cash 5000 and the insurance company admitted for only 3500

c.       A fire broke into the business and goods worth 10000 were lost. The insurance company admitted the full claim.

d.       Received claim from a customer for 1000 for late supply. Claim admitted for 6000

Journal Entries

Date

Particular

L.F.

Debit

Credit

a

Goods lost by accident a/c Dr.

 

1000

 

 

   To purchase a/c

 

1000

 

(Being lost of goods by accident and no claim is admitted by an insurance company)

 

 

b

Loss of cash by theft a/c Dr.

 

1500

 

 

Insurance receivable a/c Dr.

 

3500

 

 

   To Cash a/c

 

 

5000

 

(Being cash stolen by peon and insurance company admitted partial claim)

 

 

 

c

Insurance receivable a/c Dr.

 

10000

 

 

  To Purchase a/c

 

 

10000

 

(Being goods lost by fire and the insurance company admitted the full claim)

 

 

 

d

Debtor a/c Dr.

 

600

 

 

   To Cash a/c

 

 

600

 

(Being late supply to the customer and claim received)

 

 

 

 

Total

 

16600

16600


Problem 7:

Consider the following transaction

a.       Paid cash for life insurance premium of a proprietor 12000

b.       Received commission 20000 and still to be received 5000

c.       Received rent in advance 25000

d.       Received cash for previously recorded outstanding commission

e.       Earned advance rent received 20000

f.        Sold old computer having book value 20000 on credit for 19000

g.       Withdrew cash from bank 15000 for personal use

h.       Paid salary 25000 by cheque, and still due 10000

i.         Paid insurance premium in advance 9000

j.         Paid for salary outstanding 10000

k.       A bad debt of 5000 recovered which was previously written off.

 

Journal Entries

Date

Particular

L.F.

Debit

Credit

a

Life insurance premium a/c Dr.

 

12000

 

 

   To cash a/c

 

12000

 

(Being paid cash for the life insurance premium of a proprietor)

 

 

b.

Cash a/c Dr.

 

20000

 

 

Accrued commission a/c Dr.

 

5000

 

 

   To Commission a/c

 

 

25000

 

(Being received the commission and still to be received)

 

 

 

c.

Cash a/c Dr.

 

25000

 

 

   To rent a/c

 

 

25000

 

(Being received rent in advance)

 

 

 

d.

Cash a/c Dr.

 

5000

 

 

  To outstanding commission a/c

 

 

5000

 

(Being received cash for previous recorded outstanding commission)

 

 

 

e.

Cash a/c Dr.

 

20000

 

 

  To Earn advance rent received

 

 

20000

 

(Being earned advance rent received)

 

 

 

f.

Computer a/c Dr.

 

20000

 

 

   To debtors a/c

 

 

19000

 

    To loss a/c

 

 

1000

 

(Being sold old computer with loss)

 

 

 

g.

Drawing a/c Dr.

 

15000

 

 

   To Bank a/c

 

 

15000

 

(Being withdrew cash from the bank for personal use)

 

 

 

h.

Salary a/c Dr.

 

35000

 

 

  To bank a/c

 

 

25000

 

  To outstanding salary a/c

 

 

10000

 

(Being paid salary by cheque and still due)

 

 

 

i.

Advance insurance premium a/c Dr

 

9000

 

 

  To cash a/c

 

 

9000

 

(Being paid insurance premium in advance

 

 

 

j.

Salary outstanding a/c Dr.

 

25000

 

 

  To cash a/c

 

 

25000

 

(Being paid for salary outstanding)

 

 

 

k.

Cash a/c Dr.

 

5000

 

 

  To bad debts recovered a/c

 

 

5000

 

(Being a bad debt recovered which was previously written off)

 

 

 

 

Total

 

196000

196000

 


Problem 8:

You are given the following information:

a. Interest 250 charged by the bank.

b. Salaries paid to clerk 4000

C. Furniture purchased for 4000 in January is valued at 3600 at the end of December

d. Old equipment having a book value of 9000 was sold for 8000

e. Commission of 5000 received in advance

f. Sold old furniture having a book value of 3600 at 4000

g. Outstanding salary for the last month of the last fiscal year, 5000 now paid

h. Provide 5 percent interest on capital. The amount of capital is 100000

Required: Journal Entries

Journal Entries

Date

Particular

L.F.

Debit

Credit

a

Interest on Loan a/c Dr.

 

250

 

 

   To Loan a/c

 

250

 

(Being lost of goods by accident and no claim is admitted by an insurance company)

 

 

b.

Salaries a/c Dr.

 

4000

 

 

   To Cash a/c

 

 

4000

 

(Being salaries paid to clerk)

 

 

 

c.

Depreciation a/c Dr.

 

400

 

 

   To Furniture a/c

 

 

400

 

(Being depreciation charged on furniture)

 

 

 

d.

Cash a/c Dr.

 

8000

 

 

Loss a/c Dr.

 

1000

 

 

   To equipment a/c

 

 

9000

 

(Being sold old equipment for cash at a loss)

 

 

 

e.

Cash a/c Dr.

 

5000

 

 

  To Unearned Commission a/c

 

 

5000

 

(Being commission received in advance)

 

 

 

f.

Cash a/c Dr.

 

4000

 

 

  To Furniture a/c

 

 

3600

 

  To Profit and Loss a/c

 

 

400

 

(Being furniture sold for cash at a profit)

 

 

 

g.

Outstanding Salary a/c Dr.

 

5000

 

 

   To Cash a/c

 

 

5000

 

(Being outstanding salary paid for cash)

 

 

 

h.

Interest on capital a/c Dt.

 

5000

 

 

   To Capital a/c

 

 

5000

 

(Being interest on capital provided @ 5% of capital)

 

 

 

 

 


Problem 9:

Pass journal entries for the following transaction

a.       Provide depreciation on Furniture 1500 and Machinery 3500

b.       A customer of 4000 was declared insolvent and entire amount receivable from him written off as bad debts

c.       Received cash 3150 for bad debt written off last year

d.       Paid 4000 and 20000 for wages and salary respectively.

e.       Purchased furniture for 16000 for the proprietor and paid the amount by cheque.

 

Journal Entries

Date

Particular

L.F.

Debit

Credit

a.

Depreciation a/c Dr.

 

1000

 

 

   To Furniture

 

1000

 

   To Machinery a/c

 

 

 

(Being depreciation charged on machinery and furniture)

 

 

 

b.

Bad Debt a/c Dr.

 

4000

 

 

   To Debtor's a/c

 

 

4000

 

(Being bad debt written off)

 

 

 

c.

Cash a/c Dr.

 

3150

 

 

   To Bad debts recovered a/c

 

 

3150

 

(Being bad debt recovered)

 

 

 

d.

Wages a/c Dr.

 

4000

 

 

Salary a/c Dr.

 

20000

 

 

   To Cash a/c

 

 

24000

 

(Being wages and salary paid)

 

 

 

e.

Drawings a/c Dr.

 

 

 

 

   To Bank a/c

 

 

 

 

(Being furniture purchased for private use and paid by cheque)

 

 

 


Problem 10:

Journalize the following transaction

a.       Commenced business with cash 50000

b.       Bought machinery of 10000 and paid immediately by cheque

c.       Paid for installation charge in machinery 400

Journal Entries

Date

Particular

L.F.

Debit

Credit

a

Cash a/c Dr.

 

50000

 

 

   To capital a/c

 

50000

 

(Being a business started with cash)

 

 

b

Bank a/c Dr

 

40000

 

 

  To Cash a/c

 

 

40000

 

(Being cash deposited into a bank)

 

 

 

c

Machinery a/c Dr.

 

10000

 

 

  To Bank a/c

 

 

10000

 

(Being recorded the purchase of machinery and payment made by cheque)

 

 

 

d

Machinery a/c Dr

 

400

 

 

   To cash a/c

 

 

400

 

(Being installation charges paid on machinery)

 

 

 


Problem 11:

For the following transactions given, prepare journal entries.

March 1: Purchased goods for cash 5000 and on credit for 10000

March 3: Sold goods on account for 5000

March 5: Received a cheque from the debtor 4900 for full settlement of his account

March 10: Paid 8000 to the creditor for full settlement of his account

March 11: Goods worth 20000 sold on credit to Shital for 23000

March 14: A cheque received from Shital of 5000 was deposited in the bank

March 17: Shital's cheque was dishonored and returned to her.

March 21: Bank charged 200 for the service charge.

Journal Entries

Date

Particular

L.F.

Debit

Credit

March

Purchased a/c Dr

 

15000

 

1

   To cash a/c

 

5000

 

   To credit a/c

 

10000

 

(Being purchased goods for cash and on credit)

 

 

 

March

Debtors a/c Dr.

 

 

 

3

   To sales a/c

 

5000

 

 

(Being sold goods on account)

 

 

5000

March

Bank a/c Dr

 

4900

 

5

Discount a/c Dr

 

100

 

 

   To debtor a/c

 

 

5000

 

(Being cheque received from a debtor for full settlement of his account)

 

 

 

March

Creditors a/c Dr

 

10000

 

10

   To cash a/c

 

 

8000

 

   To Discount a/c

 

 

2000l

 

(Being paid to the creditor for full settlement of his account)

 

 

 

March

Shital's a/c Dr

 

23000

 

11

   To sales a/c

 

 

23000

 

(Being goods sold on credit to Shital)

 

 

 

March

Bank a/c Dr

 

5000

 

14

  To cash a/c

 

 

5000

 

(Being cheque received from Shital deposited in the bank)

 

 

 

March

Shital a/c Dr

 

5000

 

17

   To Bank a/c

 

 

5000

 

(Being Shital's cheque was dishonored and returned to her)

 

 

 

March

A service charge of bank a/c Dr

 

200

 

21

   To bank a/c

 

 

200

 

(Being Bank charged for service charge)

 

 

 


Problem 12:

Journalize the following transactions

July 1: Started business by depositing cash into bank 250000

July 3: Purchased goods for 15000; giving a cheque of 5000 and balance on a credit

July 6: Sold goods (costing 3000) for cash 2000

July 10: Fire occurred and destroyed goods costing 1500

Journal Entries

Date

Particular

L.F.

Debit

Credit

July

Bank a/c Dr.

 

250000

 

1

   To capital a/c

 

250000

 

(Being started business with depositing cash into the bank)

 

 

July

Purchase a/c Dr

 

15000

 

3

   To bank a/c

 

 

5000

 

   To creditors a/c

 

 

10000

 

(Being purchased goods and giving cheque and rest balance on credit)

 

 

 

July

Cash a/c Dr

 

2000

 

6

Loss on sales of goods a/c Dr

 

1000

 

 

    To sales a/c

 

 

3000

 

(Being sold goods for cash at loss)

 

 

 

July

Destroyed goods by fire a/c Dr

 

1500

 

10

   To purchase a/c

 

 

1500

 

(Being fire occurred and destroyed goods)

 

 

 

 

Journalizing Bills of Exchange


Problem 13:

The following transactions are given to you:

a.       Ram sold goods on credit to Shyam for 25000

b.       Ram received an accepted bill drawn to Shyam for 2 months.

c.       Shyam paid the due amount of the bill on the due date.

d.       Ram purchased goods on credit from Mahesh for 30000

e.       Ram accepted the bill for 3 months drawn to him and returned to Mahesh.

f.        On the due date Ram paid for the bill discounted by Mahesh after a month of issue of the bill

Required: Journal entries in the book of Ram

Journal Entries

Date

Particular

L.F.

Debit

Credit

a.

Shyam's a/c Dr

 

25000

 

 

   To Ram's a/c

 

25000

 

(Being goods sold on credit to Ram)

 

 

b.

Bills Receivable a/c Dr

 

25000

 

 

   To Shyam's a/c

 

 

25000

 

(Being received accepted bills from Shyam for 2 months)

 

 

 

c.

Cash a/c Dr

 

25000

 

 

   To Bills Receivable a/c

 

 

25000

 

(Being cash received from Shyam on bills on due date)

 

 

 

d.

Purchased a/c Dr

 

30000

 

 

   To Mahesh

 

 

30000

 

(Being goods purchased on credit from Mahesh)

 

 

 

e.

Mahesh a/c Dr

 

30000

 

 

  To Bills payable a/c

 

 

30000

 

(Being accepted of bills drawn by Mahesh for 3 months)

 

 

 

f.

Bills Payable a/c Dr

 

30000

 

 

   To Cash a/c

 

 

30000

 

(Being cash paid on bills on due date)

 

 

 


Problem 14:

Consider the following transaction of Bishal

April 15: Sold goods to Mohan of 18000

April 15: Bills drawn for 2 months and accepted by Mohan

April 20: The bill endorsed to Rajesh

June 18: The bill was honored.

Required:  Entries in the books Bishal and Mohan

Journal Entries in the books of Bishal

Date

Particular

L.F.

Debit

Credit

April

Mohan's a/c Dr

 

18000

 

15

   To sales a/c

 

18000

 

(Being goods sold to Mohan)

 

 

April

Bills receivable a/c Dr

 

18000

 

15

   To Mohan's a/c

 

 

18000

 

(Being bill drew upon Mohan)

 

 

 

April

Rajesh's a/c Dr

 

 

 

20

   To Bills receivable a/c

 

 

 

 

(Being bill drew upon Mohan endorsed to Rajesh)

 

 

 

June

18

No entry

 

 

 

Journal Entries in the books Mohan

Date

Particular

L.F.

Debit

Credit

April

Purchased a/c Dr

 

50000

 

15

   To Bishal's a/c

 

50000

 

(Being goods purchased from Bishal)

 

 

April

Bishal's a/c Dr

 

18000

 

15

   To Bills payable a/c

 

 

18000

 

(Being bills payable to Bishal)

 

 

 

April

20

No entry

 

 

 

June

Bills payable a/c Dr

 

18000

 

18

  To Cash a/c

 

 

18000

 

(Being amount of bills payable paid)

 

 

 


Problem 15:

Record the following transaction in the book of Karki

Mr. Karki drew the bill for 150000 on Mr. Basnet, payable for 3 months. Mr. Basnet accepted the bill and returned to Karki. Karki discounted the bill with the bank at a 5% discount when there were just 15 days remaining to maturity of the bill. On the due date, Mr, Basnet dishonored the bill. The bill was returned to Karki by the bank with noting charge of 150.

Journal Entries in the book of Karki

Date

Particular

L.F.

Debit

Credit

a

Bills Receivable a/c Dr

 

150000

 

 

   To Mr. Basnet

 

150000

 

(Being received of accepted bills by Mr. Basnet)

 

 

b

Bank a/c Dr

 

149687.50

 

 

Discount a/c Dr

 

312.50

 

 

    To Bills Receivable a/c

 

 

150000

 

(Being discounted the bills @ 5% p.a for 15 days)

 

 

 

c

Bills Receivable a/c Dr

 

150150

 

 

   To bank a/c

 

 

150150

 

(Being bills dishonored and reimbursing the bill amount including noting charge to the bank)

 

 

 

 Note: Calculation of Discount Amount

Discount= Face amount of Bill X Rate of Discount X Remaining periods of maturity

= (150000 x 5 X 15) / (100 X 360)

= 312.50

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