Illustration - II
Rajiv sold goods to Pankaj for ` 40,000 on January 1st, 2011. On the same date Rajiv drew a bill of the same amount at 3 month on Pankaj. The bill was accepted by Pankaj. Rajiv discounted the bill with his bank on 4th February, 2011 @ 12% per annum. On date of maturity, the bill was dishonoured and noting charges ` 200 were paid by bank.
Pankaj agreed to pay ` 10,200 and accpted another bill for the remaining amount for 3 months together wih interest @ 9% per annum. On July 4, 2011, Pankaj becomes insolvent and a first and final dividend of 60 paise in a rupee was received from his private estate on 15th July, 2011.
Give Journal Entries in the books of Rajiv and Pankaj.
Solution :
Points to Remember :
1. When calculating Date of Maturity the following points must be considered :
(i) In case of "Bill at sight" or "Bill on demand" 3 days of grace are NOT allowed.
(ii) When the term of bill is mentioned in no of days, then
Date of drawing the bill is not included.
Date of payment is included in determining date of maturity .
If date of maturity falls on a day which is public holiday, the maturity date
of the bill shall be "PRCEDING DAY'.
If maturity date is on an emergent holiday declared under the Negotiable
Instolement Act. 1881, the next working day immediately after the holi
day will be considered as the date of maturity.
(iii) When the period is stated in months the date of maturity shall be calculated
in terms of calender months ignoring the no. of days in a month.2. Noting Charges :
(i) Noting charges are not an expense for the drawer.
(ii) It is always debited as 'Noting chargers in the books of drawee.
(iii) Noting charges are recovered by drawer from drawee.
(iv) Noting charges are paid only when noting of the bill is necessary any at the time DISHONOUR of bill.
(v) Noting of the bill is NOT required when the bill is CANCELLED with the
consent of both the parties, specially at the time of RENEWAL of Bill.
CBSE Accountancy Class XI ( By Mr. Aniruddh Maheshwari )
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