On Jan 15, 2016 Raghu sold goods worth  Rs  35,000 to Devendra and drew upto the latter three bills
Channel: Doubtnut
Date: 11/11/2021

On Jan 15, 2016 Raghu sold goods worth  Rs  35,000 to Devendra and drew upto the latter three bills of exchanges. The first bill was for  Rs 5,000 payable after one month, the second bill was for  Rs 20,000 payable after three months and third bill for balance amount for 4 months. Raghu endorsed the first bill in favour of his creditor Dewan in full settlement of a debt of Rs  5,200. The second bill was discounted by Raghu @ 6 % p.a. and the third bill was retained by Raghu till the date of maturity. Devendra dishonoured the bill on maturity and the bank paid  Rs   30 as noting charges. Four days before the maturity of the third bill Raghu, sent the same for collection to his bank. The third bill was also dishonored by Devendra and the bank paid  Rs 200 as noting charges. Five days after the dishonour of the bill Devendra paid the entire amount due to Raghu along with interest  Rs 1,000 for this purpose Devendra obtained a short term loan from his bank. You are requested to record the necessary journal entries in the books of Raghu Devendra and Dewan and also prepare Devendra’s account in Raghu’s books and Raghu’s account in Devendra’s account.