Page 10 - LESSON NOTE

The journal entries recorded in case of renewal for the cancellation of the old bill,
for interest and for the acceptance of the new bill in the books of the drawer and
drawee are given below:

Books of Drawer

Cancellation of old bill

Drawee’s A/c Dr.

To Bills Receivable A/c

Interest

Drawee’s A/c Dr.

To Interest A/c

New bill

Bill Receivable A/c Dr.

To Drawee’s A/c

Books of Drawee

Cancellation of old bill

Bills Payable A/c Dr.

To Drawer’s A/c

Interest

Interest A/c Dr.

To Drawer’s A/c