pass the journal entries for the following
(1) discountd bill of rs.1000 at1% by bank
(2) interest allowed by bank rs.5000
To pass the journal entries for the given transactions, you need to identify the accounts involved and their respective debit or credit aspects. Here's how you can do it:
(1) Discounted bill of Rs. 1000 at 1% by the bank:
To record this transaction, you need to consider three accounts: Bank, Discount Received, and Bills Payable.
The journal entry would be as follows:
Bank Account Dr. Rs. 990 (Rs. 1000 - Rs. 10)
Discount Received Account Dr. Rs. 10
To Bills Payable Account Rs. 1000
Explanation: In this entry, the Bank account is debited with Rs. 990, which is the actual amount received after deducting the discount of Rs. 10 (1% of Rs. 1000). The Discount Received account is debited with Rs. 10 to record the discount received. The Bills Payable account is credited with Rs. 1000, as the bill has been discounted.
(2) Interest allowed by the bank Rs. 5000:
To record this transaction, you need to consider two accounts: Bank and Interest Income.
The journal entry would be as follows:
Bank Account Dr. Rs. 5000
To Interest Income Account Rs. 5000
Explanation: In this entry, the Bank account is debited with Rs. 5000, which represents the amount paid by the bank as interest. The Interest Income account is credited with Rs. 5000, as it represents the income earned from the interest allowed by the bank.
Remember, it is essential to have a proper understanding of accounting principles and double-entry bookkeeping to correctly record journal entries.