1. Acceptance of bill Bill receivable a/c Dr. To Sundry Debtor's A/c
2. Bill Discounted Bank A/c Dr. Discount A/c Dr. To Bill receivable A/c
3. bill dishonored Sundry Debtors A/c Dr. To Bank Account
As you can see that bill receivable have been created and on discounted of bill the account have been closed. but at the time of bill dishonored the person have a liability to pay to bank and have an right to receive from sundry creditor
in case of cash, at the time of dishonored of bill, cash have to pay to person who have discounted the bill.
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