Ravi sold goods for Rs. 40,000 to Sudershan on Feb 13,2006. He drew four bills of exchange upon Sudershan. The first bill was for Rs. 5,000 payable after one month. The second bill was for Rs. 10,000 payable after 40 days: the third bill was for Rs.12,000 payable after three months and accepted all the bills and returned the same to Ravi. Ravi discounted the first bill with his bank at 6% p.a. He endorsed the second bill to his creditor Mustaq for the full settlement of a debt of Rs. 10,200. The third bill was kept by Ravi with him till the date of maturity. Five days before the maturity of the fourth bill. Ravi sent the bill to his bank for collection. All the four bills were dishonoured by Sudarshan on maturity. Sudershan settled Ravi’s claim in cash three days after the dishonor of each bill along with interest @ 12% p.a. for the terms of the bills.
You are requested to record the necessary journal entries in the books to Ravi, Sudershan, Mustaq and bank for the above transaction. Also Prepare Sudershan’s account and Mustaq’s account in the books of Ravi.
