Cpt foundation

karthik sold goods on 1 jan 2015 to rajesh for rs 200000 and accepted a bill for 3 months on the due date rajesh requested to cancel the old bill and write a new bill for 3 months with interest 12% . journalise in the books of both the parties
Replies (1)

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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