Note :
1. No Entry for noting charges is passed at the time of cancellation of original bill because both the parties are mutually agreed to cancel the old bill.
2. Rate of interest must be carefully noticed that it is in
% per annum (Time is important)
or % .
When rate of interest is given in % form, time extended for payment is not considered.
Example :
A bill is renewed for a period of 3 months. Amount of old bill cancelled is ` 50,000. Find the amount of interest for the extended period if.
Case I Rate of Interest is 8% per annum.
Case II Rate of Interest is 6%.
Solution :
Illustration - 8 :
On 1st April, 2011 Anil accepts a bill drawn by Sunil for 2 months for ϕ 15000, in payment of a debt. On the date of maturity bill was dishonoured and Sunil had to pay ϕ 150 as noting charges. On 4th June 2011, Anil requested to Sunil to draw a new bill for the amount due. Sunil agreed to draw a new bill for 73 days but he charged interst @ 15% per annum in cash. This bill is duly met on its maturity.
Pass Journal entries in the books of both the parties.
Solution :
CBSE Accountancy Class XI ( By Mr. Aniruddh Maheshwari )
Email Id : [email protected]
