A promissory note for Rs 5,000 in favour of Mohan settled by sending him Tania's acceptance for Rs5,000.The required journal entry will be:
Ans: Bill payable Dr 5,000
To Bills receivable 5000
Please explain what does mean?Is it endorsement question? who is maker,payee,creditor here?
Can we call maker drawee?
This transaction means that the person whose books we are writing had given a Promissory note to Mohan (may be he was creditor) which he settled by handing over to him a Bill of Exchange received from Tania (who was his debtor). This Bill of Tania he must have given to Mohan by endorsing only
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Gupta Sachdeva & Co. Chartered Accountants
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