From Chapter Bill of Exchange
(Mumbai, Maharashtra, India)
Manish accepted a bill of Rs.40,000 drawn by Krishna at 3 months.
Krishna got the bill discounted with his bank for Rs.39,000.
Before the due date, Manish approached Krishna for renewal of the bill.
It was agreed to pay Rs.30,000 immediately together with interest on the remaining amount at 10% p.a for 3 months and for the balance Manish accepted a new bill for 3 months. These arrangements were carried through.
But afterwards Manish became insolvent. Only 35% of the amount could be recovered from his estate.
1)Pass necessary Journal Entries in the books of Manish
2)Prepare Manish's A/c in the books of Krishna