It is assumed that Interest is also payable with original amount in extended period.
In the books of kartik
On sale
Rajesh A/c Dr. 2 Lakhs
To Sales A/c 2 Lakhs
on 3 months bill acceptance
Bill receivable A/c Dr. 2 Lakhs
To Rajesh A/c 2 Lakhs
On cancellation the bill for renewal
Rajesh A/c Dr. 2 Lakhs
To Bill receivable A/c 2 Lakhs
For interest
Rajesh A/c Dr. 6000
To Interest A/c 6000
New acceptance
Bill receivable A/c Dr. 2.06 Lakhs
To Rajesh A/c 2.06 Lakhs
In the books of Rajesh
Purchase A/c Dr. 2 Lakhs
To Kartik A/c 2 Lakhs
on 3 months bill acceptance
Kartik A/c Dr. 2 Lakhs
To Bill payable A/c 2 Lakhs
On cancellation the bill for renewal
Bill payable A/c Dr. 2 Lakhs
To Kartik A/c 2 Lakhs
For interest
Interest A/c Dr. 6000
To Kartik A/c 6000
New acceptance
Kartik A/c Dr. 2.06 Lakhs
To Bill payable A/c 2.06 Lakhs
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