Bill of exchange new

1. OMTEX CLASSES
BILL OF EXCHANGE
Problem No. 1
Journalize the following transactions in the books of Maharaja. [Ans]
i. Ayub informs Maharaja that Sadashiv’s acceptance for Rs. 2,000
endorsed to Ayub has been dishonoured, noting charges amounted
to Rs. 150.
ii. Pankaj renews his acceptance to Maharaja for Rs. 1200 by paying
Rs. 400 in cash and accepting a fresh bill for the balance plus
interest at 12% p.a. for 3 months..
iii. Vaibhav’s acceptance to Maharaja for Rs. 6000 retired one month
before the due date at a discount of 12%p.a.
iv. Bank informs Maharaja as to the dishonour of Kasam’s acceptance
for Rs. 2000 to Maharaja discounted with Bank noting charges Rs.
200.
Problem No. 2
Journalise the following transactions in the book’s of Bhaskar. [Ans]
i. Suresh informed Bhaskar that Nishad’s acceptance for Rs. 2500
endorsed to Suresh has been dishonoured and noting charges
amounted to Rs. 25.
ii. Rajesh renews his acceptance to Bhaskar for Rs. 7500 by paying
Rs. 2500 in cash and accepting a fresh bill for the balance plus
interest @ 10% p.a. for three months.
iii. Mandar retired his acceptance to Bhaskar for Rs. 3,800 by paying
Rs. 3750 in cash.

2. OMTEX CLASSES
iv. Bhaskar sent a bill of Dayaram for Rs. 5000 to the bank for
collection. But the bank informed that the bill has been dishonoured
by Dayaram.
Problem No. 3
Journalize the following transactions in the books of Kamesh: [Ans]
i. Nanda informs Kamesh that Shanti’s acceptance for Rs. 4,000
endorsed to Nanda has been dishonoured and noting charges have
been Rs. 100.
ii. Ashok renews his acceptance to Kamesh for Rs. 2400 by paying
Rs. 800 in cash and accepting a new bill for the balance plus interest
@ 12 p.a. for 3 months.
iii. Deva’s acceptance to Kamesh Rs. 12,000 is retired one month
before its due date at a discount of 12% p.a.
iv. The bank informs Kamesh that Sudhakar’s acceptance for Rs.
4,000 has been dishonoured and it has paid noting charges Rs. 80.
Problem no. 4
On 1st
March, 2013. Ramchandra sold goods to Raman worth Rs.
8,000/- and Raman accepted the Bill for Rs. 8,000/- at 3 months
drawn by Ramchandra. Ramchandra discounted the bill with his
bank @ 6% p.a. On due date the bill was dishonoured and Raman
requested Ramchandra to accept Rs. 4,000/- immediately and draw
upon him a new bill for the remaining amount at 3 months together
with an interest @ 10% p.a. Ramchandra agreed. The second Bill
was duly honoured. Give Journal entries in the books of
Ramchandra. [Ans]
Problem no. 5

3. OMTEX CLASSES
Premlal sold goods to Sunderlal worth Rs. 10,000/- and Sunderlal
accepted the bill for Rs. 10,000/- at 3 months drawn by Premlal.
Premlal discounted the bill with his bank @ 6 % p.a. On due date the
bill was dishonoured and Sunderlal requested Premlal to accept Rs.
4,000 immediately and draw upon him a new bill for the remaining
amount at 3months together with an interest at 10% p.a. Premlal
agreed and the second bill was duly honoured. Give the Journal
entries in the books of Premlal. [Ans.]
Problem no. 6
Archana purchased goods from Babita on credit for Rs. 20,000. On
next day Archana paid Rs. 10,000 to Babita and accepted a bill
drawn by Babita for the balance amount for four months. Babita
discounted the bill with her bank for Rs. 9600/-. Before the due date
Archana approached Babita with a request to renew the Bill. Babita
agreed with the condition that Archana should pay Rs. 6000 along
with interest of Rs. 120 and accept a new bill for the balance. These
arrangements were duly carried out. New bill is met on the due date.
Pass journal entries in the books of Babita. [Ans.]
Problem no. 7
Bhagyashri sold goods to Rupa worth Rs. 24,000 to Rupa. On the
next day Rupa paid Rs. 10,000 in cash and accepted 4 months bill for
balance amount drawn by Bhagyashri. Bhagyashri discounted the
bill at 10% p.a. after one month with her bank. On due date Rupa
dishonoured her acceptance and noting charges amounted to Rs.
200. Rupa paid half the amount of the bill and full amount of noting
charges. Rupa accepted a new bill at 2 months for the balance
amount plus interest Rs. 100. Pass necessary journal entries in the
books of Bhagyashri. [Ans.]
Problem no. 8
Baloo owes Kaloo Rs.8000. Kaloo then draws a bill for Rs. 8000 on
Baloo for a period of three months. Baloo accepts and return it to
Kaloo. Kaloo discounted the bill with his bank @ 12 % p.a. On due
date, the bill was dishonoured noting charges amount to Rs. 30.

4. OMTEX CLASSES
Kaloo then draws a bill for the balance plus interest of Rs. 170.
Before the due date of this bill Baloo pays the amount at a discount
of Rs. 40 to retire the bill. Pass Journal Entries in the books of
Kaloo. [Ans.]
Problem No. 9.
Minal draws a bill on Usha for Rs. 5,000 at 3 months. Usha accepts
the bill and return to Minal. Minal discounted the bill @ 12 % p.a.
with the bank. On Maturity Usha finds herself unable to make
payment of the bill and requested Minal to renew the bill. Minal
accepts the proposal on the condition that Usha should Pay Rs. 2,000
in cash and accept a new bill at one month along with interest at
10% p.a. These arrangements were carried through. Usha retires the
bill by paying Rs. 3015/- Pass Journal Entries in the books of
Minal. [Ans]
Problem No. 10
Sonia draws a bill on Moni for Rs. 6,000 at 4 months. Moni accepts
the bill and returns it to Sonia who discounts the bill with the bank
at a discount of 8% p.a. Before the due date of Bill Moni requested
Sonia to accept Rs. 4000 in cash and draw a bill for the balance plus
interest at 12% p.a. for two months. Sonia draws a bill as the
request is agreed. The bill is sent to bank for collection. On the due
date the bill was honoured. Pass the necessary journal entries in the
books of Sonia. [Ans]
Problem No. 11
On 1st
March, 2014. Bheem sold goods to Raju worth Rs. 10,000/-
and Raju accepted the Bill for Rs. 10,000/- at 3 months drawn by
Bheem. Bheem discounted the bill with his bank @ 10% p.a. On due
date the bill was dishonoured and Raju requested Bheem to accept
Rs. 4,000/- immediately and draw upon him a new bill for the
remaining amount at 3 months together with an interest @ 10% p.a.
Bheem agreed. The second Bill was duly honoured. Give Journal
entries in the books of Bheem. [Ans]

5. OMTEX CLASSES
Problem No. 12
Sachin sold goods to Dhoni worth Rs. 1,00,000/- and Dhoni accepted
the bill for Rs. 1,00,000/- at 3 months drawn by Sachin. Sachin
discounted the bill with his bank @ 10 % p.a. On due date the bill
was dishonoured and Dhoni requested Sachin to accept Rs. 40,000
immediately and draw upon him a new bill for the remaining amount
at 3months together with an interest at 10% p.a. Sachin agreed and
the second bill was duly honoured. Give the Journal entries in the
books of Dhoni. [Ans]
Problem No. 13
Rose purchased goods from Lilly on credit for Rs. 2,000. On next day
Rose paid Rs. 1,000 to Lilly and accepted a bill drawn by Lilly for the
balance amount for four months. Lilly discounted the bill with her
bank for Rs. 960/-. Before the due date Rose approached Lilly with a
request to renew the Bill. Lilly agreed with the condition that Rose
should pay Rs. 600 along with interest of Rs. 12 and accept a new
bill for the balance. These arrangements were duly carried out. New
bill is met on the due date. Pass journal entries books of Lilly. [Ans]
Problem No. 14
Kaveri sold goods to Ganga worth Rs. 4,000 to Ganga. On the next
day Ganga paid Rs. 1,000 in cash and accepted 4 months bill for
balance amount drawn by Kaveri. Kaveri discounted the bill at 10%
p.a. after one month with her bank. On due date Ganga dishonoured
her acceptance and noting charges amounted to Rs. 20. Ganga paid
half the amount of the bill and full amount of noting charges. Ganga
accepted a new bill at 2 months for the balance amount plus interest
Rs. 100. Pass necessary journal entries in the books of Kaveri. [Ans]
Problem No. 15

6. OMTEX CLASSES
Ronaldo owes Ricardo Rs.80,000. Ricardo then draws a bill for Rs.
80,000 on Ronaldo for a period of three months. Ronaldo accepts
and return it to Ricardo. Ricardo discounted the bill with his bank @
10 % p.a. On due date, the bill was dishonoured noting charges
amount to Rs. 300. Ricardo then draws a bill for the balance plus
interest of Rs. 1700. Before the due date of this bill Ronaldo pays the
amount at a discount of Rs. 400 to retire the bill. Journal Entries
Ronaldo. [Ans]
Problem No. 16
Sun draws a bill on Moon for Rs. 15,000 at 3 months. Moon accepts
the bill and return to Sun. Sun discounted the bill @ 10 % p.a. with
the bank. On Maturity Moon finds herself unable to make payment of
the bill and requested Sun to renew the bill. Sun accepts the
proposal on the condition that Moon should Pay Rs. 12,000 in cash
and accept a new bill at one month along with interest at 10% p.a.
These arrangements were carried through. Moon retires the bill by
paying Rs. 3015/- Pass Journal Entries in the books of Sun. [Ans]
Problem No. 17.
Nazriya draws a bill on Anitha for Rs. 60,000 at 4 months. Anitha
accepts the bill and returns it to Nazriya who discounts the bill with
the bank at a discount of 10% p.a. Before the due date of Bill Anitha
requested Nazriya to accept Rs. 40000 in cash and draw a bill for the
balance plus interest at 12% p.a. for two months. Nazriya draws a
bill as the request is agreed. The bill is sent to bank for collection.
On the due date the bill was honoured. Pass the necessary journal
entries in the books of Anitha. [Ans.]
Problem No. 18.
8. Anil drew a bill for Rs. 4,000 on Navin on 1st
May, 2013 for three
months. This was for the amount which Navin owed to Anil. Navin
accepts the same and return it to Anil who discounted at his bank for
Rs. 3,900. On 1st
Aug, 2013 Navin requested Anil to renew the bill

7. OMTEX CLASSES
and Anil agreed on the condition that Rs. 1,000 is paid immediately
and Navin should accept the new bill for 3 months for the balance
payable plus interest of Rs. 45. These arrangements were carried
through. However, on 1st
October, 2013, Navin retired his
acceptance for Rs. 3, 035. Pass journal entries in the books of
Anil. [Ans]
Problem No. 19.
9. Karthik accepted a bill for Rs. 20,000/- drawn by Jones at three
months. Jones got the bill discounted with his bank for Rs. 19,900.
Before the due date Karthik approached Jones for renewal of the bill.
Jones agreed on the condition that Rs. 10,000/- be paid immediately
together with interest on the remaining amount at 6% p.a. For
balance Karthik should accept a new bill for three months. These
arrangements were carried through but afterwards, Karthik become
Insolvent and only 80 % of the amount could be recovered from his
estate. Give journal entries in the books of Karthik. [Ans]
Problem No. 20.
10. Ajith accepted a bill for Rs. 10,000 drawn by Surya at three
months. Surya got the bill discounted with his bank for Rs. 9,700.
Before the due date, Ajith approached Surya for renewal of the Bill.
Surya agreed on the condition that Rs. 7,000 is paid immediately
together with an interest on remaining amount at 18% p.a. for four
months and for the balance Ajith should accept a new bill. But
afterwards Ajith become insolvent and only 25% of the amount
could be recovered from her estate. Pass journal entries in the books
of Surya. [Ans]
Problem No. 21.
Salman draws a bill on Amithab worth Rs. 90,000 for three months
which was accepted by Amithab. On the same date Salman
discounted the bill with his bank @ 10 % p.a. On the due date
Amithab dishonoured his acceptance. Amithab paid Rs. 40,000/- to
Salman and accepted a fresh bill for two months for the balance
including interest of Rs. 4000. Amithab became insolvent before the

8. OMTEX CLASSES
maturity of the bill and 50 paise in a rupee was received at first and
final dividend from his estate. Journal entries books of
Amithab. [ANS]
Problem No. 22.
On 1st
January, 2014 Archana drew a bill for Rs. 6,000 for 2 months
periods on Ramya. Ramya duly accepted the bill. On 4th
January
2014 Archana discounted the bill with her bank for Rs. 5850.
However, on the due date the bill was dishonoured. Ramya agreed to
accept a new bill with an interest of Rs. 150 for a period of one
month. The bill was duly met on the due date. Give the journal
entries in the books of Archana and show Archana’s account in the
books of Ramya. [ANS]
Problem No. 23.
Mukesh owes Anil Rs. 40000 for which Anil draws a bill for 2 months
on 1st
February, 2014. Mukesh accepts it and returns it to Anil. On
4th
March, 2014, Mukesh approaches Anil and request him to accept
Rs. 10000 in cash and draw a fresh bill for 3 months for the balance
plus interest @ 10% p.a. Anil accepts the request and draw a bill
accordingly which is accepted by Mukesh. On 1st
June 2014 Mukesh
retired his acceptance under discount of Rs. 30/-. Pass journal
entries in the books of Anil and prepare Anil account in the ledger of
Mukesh. [ANS]
Problem No. 24.
Anjali of Nagpur sold goods worth Rs. 25,000 to Rupali of Amaravati. On
next day Ruapali paid Rs. 10,000 in cash and accepted two months bill for
the balance drawn by Anjali. Anjali discounted the bill at 12% p.a. with her
bank. Before due date, Rupali finds herself unable to make payment of the
bill; and requests Anjali to renew it. Anjali accepts the proposal on the
condition that Rupali should pay Rs. 5,000 in cash and accept new bill for
one month along with interest Rs. 200 for the balance. These arrangements
were carried through. The new bill was met on due date. Give journal entries
in the books of Anjali. [ANS]

9. OMTEX CLASSES
Problem No. 25.
Prakash drew a bill for Rs. 4,000 on Anand on 1st
May, 2013 for three
months. This was for the amount which Anand owed to Prakash.
Anand accepts the same and return it to Prakash who discounted at
his bank for Rs. 3,900. On 1st
Aug, 2013 Anand requested Prakash to
renew the bill and Prakash agreed on the condition that Rs. 1,000 is
paid immediately and Anand should accept the new bill for 3 months
for the balance payable plus interest of Rs. 45. These arrangements
were carried through. However, on 1st
October, 2013, Anand retired
his acceptance for Rs. 3, 035. Pass journal entries in the books of
Anand. [Ans]
Problem No. 26.
Chanda accepted a bill for Rs. 6,000 drawn by Nanda at three
months. Nanda got the bill discounted with his bank for Rs. 5,700.
Before the due date, Chanda approached Nanda for renewal of the
Bill. Nanda agreed on the condition that Rs. 3,000 is paid
immediately together with an interest on remaining amount at 18%
p.a. for four months and for the balance Chanda should accept a new
bill. But afterwards Chanda become insolvent and only 25% of the
amount could be recovered from her estate. Pass journal entries in
the books of Chanda. [Ans.]
Problem No. 27.
Pankaj draws a bill on Anil worth Rs. 8,000 for three months which
was accepted by Anil. On the same date Pankaj discounted the bill
with his bank @ 10 % p.a. On the due date Anil dishonoured his
acceptance. Anil paid Rs. 4,000/- to Pankaj and accepted a fresh bill
for two months for the balance including interest of Rs. 40. Anil
became insolvent before the maturity of the bill and 50 paise in a
rupee was received at first and final dividend from his estate. Give
Journal entries in the books of Anil. [Ans.]
Problem No. 28.
On 1st
January, 1988 Vandana drew a bill for Rs. 6,000 for 2 months
periods on Lata. Lata duly accepted the bill. On 4th
January 1988
Vandana discounted the bill with her bank for Rs. 5850. However, on

10. OMTEX CLASSES
the due date the bill was dishonoured. Lata agreed to accept a new
bill with an interest of Rs. 100 for a period of one month. The bill
was duly met on the due date. Give the journal entries in the books
of Vandana and show Vandana’s account in the books of Lata. [Ans.
]
Problem No. 29.
Mukund owes (be obligated) Prakash Rs. 4000 for which Prakash
draws a bill for 2 months on 1st
February, 1989. Mukund accepts it
and returns it to Prakash. On 4th
March, 1989, Mukund approaches
Prakash and request him to accept Rs. 1000 in cash and draw a fresh
bill for 3 months for the balance plus interest @ 10% p.a. Prakash
accepts the request and draw a bill accordingly which is accepted by
Mukund. On 1st
June 1989 Mukund retired his acceptance under
discount of Rs. 30/-. Pass journal entries in the books of Prakash
and prepare Prakash account in the ledger of Mukund.[Ans.]
Format of the Bill of Exchange
Format No. 1
Drawer : Ramesh Mishra, L.B.S. Road, Ghatkopar, Mumbai
Drawee : Nandkumar Sharma, Laxmi Road, Pune
Payee: Rupesh Kumar Pande, Rajkamal Chowk, Amaravati.
Period of bill: 90 days
Amount of bill : Rs. 25,000
Date of Bill: 17th February, 2014
Date of Acceptance: 20th February, 2014

11. OMTEX CLASSES
Accepted for : Rs. 20,000 only.
Format No. 2
Drawer : Shekhar Desai, Shastri Road, Mahad.
Drawee : Sharad Verma, Narayanpeth, Pune
Payee : Mukund Pande, Panel.
Amount : Rs. 3,500/-
Period : 3months.
Date of Bill : 21st June, 2013
Bill accepted : For 3,000 on 25th June, 2013.
Format No. 3
Drawer : Abhijit Patil, Vikram nagar, Patna.
Drawee : Tejas Kapare, Kothrud, Pune.
Payee : Amey Patki, Nagpur.
Amount : Rs. 7500
Period : 60 days

12. OMTEX CLASSES
Term : After sight
Date of Bill Drawn : 1st June 2013
Date of Acceptance : 11th June 2013
Accepted bill for Rs. : 7000 only.
Format No. 4
Drawer: Yamini Gupta, Sarvapriya Vihar, Delhi
Drawee – Kamini Sharma, Raj baug, Agra.
Period – 100 days.
Term – After acceptance
Date of Bill – 1st January, 2014
Amount – Rs. 10,500/-
Date of Acceptance – 3rd January, 2014
Format No. 5
Drawer : Mr. Avadhoot Raktade, 586. Main Road, Ajara
Drawee : Mr. Mukund Aglawe 133, Chandni Chowk, Panvel.
Amount : Rs. 8,800.

13. OMTEX CLASSES
Period : Two Months.
Date of Bill : 1 st May, 2013.
Date of Acceptance : 5 th May, 2013.
Format No. 6
Drawer : Soundariya, Neelam Bhawan, Kalyan
Drawee : Sugandi, Dastur Nagar, Amaravati
Payee : Umesh , Deogad
Period : 90 days
Amount : Rs. 7,555
Date of bill : 15th March 2012
Accepted on : 20th March 2012
Format No. 7
On 10th
March, 2013 Rajesh Bhoyar, Gandhinagar, Nagpur draws a 2
months bill for Rs. 3,000 on Samir Choudhary, Main Road, and
Belapur. Samir Choudhary accepted the bill on 15th
March 2013
Format No. 8

14. OMTEX CLASSES
Drawer : Vilas Patil, 44, M.G. Road, Nanded.
Drawee : Pankaj Pawar, 70, Bhavani Galli, Solapur.
Payee : Ramchandra Rampure, Rampur.
Period : 60 days.
Date of Bill : 28th
January, 2014
Date of Acceptance : 29th
January, 2014
Amount of the Bill : Rs. 2,800/-
Format No. 9
Drawer : Vijay Bhat, Main Road, Nagpur.
Drawee : Ashok Kulkarni, M.G. Road, Nagpur.
Payee : Anil Jadhav, Pune.
Amount : Rs. 6,950.
Period : 80 days.
Date of Bill : 7th
March, 2013.
Accepted on : 10th
March, 2013. For 90 days.

15. OMTEX CLASSES
Definition of Bills of Exchange
Fill ups . Select the most appropriate alternative form those given
below.
Write the words/ term /phrase which can substitute each of the
following statements
True or False
Journal Entries in the books of Drawer
Journal Entries in the Books of Drawee
A BILL OF EXCHANGE
Parties to Bill of Exchange
Common Rules regarding Bills of Exchange (Sections 132 and 133)
Acceptance