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Varum 8 Entries. Problem on 10th August 2022 Wikram brought goods from Varun Costing $20,000. He paid 78000 Cash and accepted a 3 months bill for the balance. A week later. Varion Endorsed the bill in favour of manoj. On the due date the bill is dishonoured and manoj Zaid 7500 Lowards noting charges. Vikram then accepted new bill for I month together with $150 for interest • Varum Paid the amount due to manoj by a cheque. Vikram duly meat his acceptance on the due date. Pass Journal entries. in the books of varun. a​

Answer :

itsKaran987

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Here are the journal entries for the transactions described:

1. **August 10, 2022:**

  • - Debit: Goods Purchased Account ($20,000)
  • - Credit: Cash Account ($7,800)
  • - Credit: Accounts Payable Account ($12,200) [Balance of the purchase]

2. **August 17, 2022:**

  • - No journal entry is required as it is just Varion endorsing the bill in favor of Manoj.

3. **Due Date (3 months later, November 10, 2022):**

  • - Debit: Accounts Payable Account ($12,200)
  • - Credit: Manoj's Account ($12,200) [As the bill is dishonored]

  • - Debit: Notes Receivable Account ($12,200)
  • - Credit: Accounts Payable Account ($12,200) [Cancellation of the dishonored bill]

- Debit: Loss on Dishonored Bill Account ($7,500)

- Credit: Cash Account ($7,500) [Payment for noting charges]

4. **New Bill Acceptance (Due 1 month later, December 10, 2022):**

  • - Debit: Manoj's Account ($20,000)
  • - Credit: Notes Payable Account ($20,000) [New bill issued]

  • - Debit: Interest Expense Account ($150)
  • - Credit: Cash Account ($150) [Interest payment]

5. **Payment to Manoj:**

- Debit: Manoj's Account ($20,150)

- Credit: Cash Account ($20,150) [Payment made by cheque]

6. **Due Date for New Bill (January 10, 2023):**

- Debit: Notes Payable Account ($20,000)

- Credit: Cash Account ($20,000) [Payment made on the due date]

These entries should reflect the transactions accurately in the books of Varun.

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