Define Bill of Exchange. Explain its advantages.

Write note on following:
(i) Renewal of a Bill
(ii) Noting Charge.

Explain the following terms regarding Bills of Exchange:
(i) Endorsement
(ii) Paying Bill of Exchange before maturity date.

Prakash received from Mohan an acceptance for Rs 30,000 on 1st July, 2014 at 3 months. Prakash got this acceptance discounted at 12% per annum at his bank. On the due date, Mohan paid the required amount Give Journal entries in the books of Prakash and Mohan.

On 1^st January, 2014, A sold goods to B for Rs 5,000 and on the same day drew upon him a bill at three months for the amount. B accepted the bill and returned it to A. On 4^th January, 2014, A discounted the bill with his bank at Rs 4,900. On the due date, the bill was dishonoured and bank paid Rs 100 as noting charges. Record these transactions in the Journals of A and B.

On 1^st October, 2014, X sells goods to Y for Rs 25,000 and draws two bills of exchange on him: the first for Rs 10,000 for two months and second for Rs 15,000 for 3 months. Y accepts and returns these bills to X. Both the bills are sent to the bank for collection. In due course, X receives the information from the bank that the bill for Rs 10,000 has been duly met and the other bill for Rs 15,000 has been dishonoured. Noting charges paid on the dishonour of the second bill are Rs 100. Pass Journal entries in the books of X.

Akash draws on Vikash three Bills of Exchange for Rs 30,000, Rs 24,000 and Rs 18,000 respectively for goods sold to him on 1^st February, 2015. These bills were of a month, 2 months and 3 months respectively. First bill was endorsed to his creditor Subhash. Second bill was discounted with bank on 4th February @ 12% p.a. and the third bill was sent to his bank for collection on 30th April. On due date all the three bills were dishonoured and nothing charge of Rs 200, Rs 150 and Rs 100 were respectively paid. On 10^th May Vikash requested Akash to draw a new bill on him for 2 months including interest of Rs 500. Akash accepted his request and this bill was duly met on maturity. Pass necessary journal entries in the books of Akash.

On 1^st July, 2014 Anuj draws a bill on Renu for Rs. 10,000 payable after 3 months for goods sold of the same amount. Anuj gets the bill discounted with his bank on 4^th August. 2014 at a discount of 9% p.a. On the due date Bank returned the bill as dishonoured with noting charges of Rs 50. Renu paid Rs 2,050 in cash and requested to draw another bill on him for the balance amount for 2 months with interest at the rate of 12% p.a. which Anuj did. The bill was met on due date. Give journal entries in the books of Anuj Only.

A bill for Rs 1,000 is drawn by P on Q and accepted by the latter payable at the New Bank of India. Show what entries should be passed in the books of P under each of the following circumstances:
(i) If P retained the bill till the due date and then realised it on maturity.
(ii) If he discounted it with his bankers for Rs 950.
(iii) If he endorsed it to his creditor R in full settlement of his debt.
(iv) If he sent it to his bankers for collection.
Also give necessary entries in each of the cases if the bill is dishonoured.

Journalise the following transactions in the books of Kamal: Ganesh informs Kamal that Sahani's promissory note for Rs 750 has been dishonoured and that noting charges Rs 10 has been paid. Kamal sends Ganesh's a cheque and withdraws the Promissory note.