Illustration 12: (Bill discounted, renewed and insolvency) Sharad sold goods to Damodar worth . 20,000, taking a bill of exchange at 3 months, dated 1st July, 2010.On 4th August he discounted the bill at 15% p.a. with his bank. On maturity the bill was returned by the bank as dishonoured and Sharad had to pay the amount of bill to the bank. Damodar paid 8,000 to Sharad and accepted new bill at three months for 12,000 puls 18% p.a. interest. But, before maturity, he became insolvent and only 50% amount was received as first and final dividend from his estate. 15% You are required to give journal entries in the books of Sharad and Damodar.

Illustration 12: (Bill discounted, renewed and insolvency) Sharad sold goods to Damodar worth . 20,000, taking a bill of exchange at 3 months, dated 1st July, 2010.On 4th August he discounted the bill at 15% p.a. with his bank. On maturity the bill was returned by the bank as dishonoured and Sharad had to pay the amount of bill to the bank. Damodar paid 8,000 to Sharad and accepted new bill at three months for 12,000 puls 18% p.a. interest. But, before maturity, he became insolvent and only 50% amount was received as first and final dividend from his estate. 15% You are required to give journal entries in the books of Sharad and Damodar.

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter9: Accounting For Receivables

Section: Chapter Questions

Problem 23MC: Orion Rentals is unable to collect on a note worth $25,000 and has accumulated interest of $250. It...

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