ad95 (none) (117 Points)
04 December 2012A promissory note for Rs 5,000 in favour of Mohan settled by sending him Tania's acceptance for Rs5,000.The required journal entry will be:
Ans: Bill payable Dr 5,000
To Bills receivable 5000
Please explain what does mean?Is it endorsement question? who is maker,payee,creditor here?
Can we call maker drawee?
Jag Bhushan Sharma
(Faculty in a B-School)
(633 Points)
Replied 04 December 2012
This transaction means that the person whose books we are writing had given a Promissory note to Mohan (may be he was creditor) which he settled by handing over to him a Bill of Exchange received from Tania (who was his debtor). This Bill of Tania he must have given to Mohan by endorsing only
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