(i) Endorsement:
Endorsement is a process by which an instrument such as bill of exchange is made payable to any third person. For example: Mohit draws a bill on Nitin. The amount of bill is generally payable to Mohit. Suppose Mohit wants to give this bill to his creditor Aman, Mohit will endorse this bill in favour of Aman. As a result, Nitin will make payment to Aman.
(ii) Paying Bill of Exchange before maturity date:
A bill of exchange is payable generally on the maturity date. But an acceptor of bill may pay bill of exchange before maturity date. In this case, payee allows a discount known as rebate.
The purpose and benefits of retiring a bill of exchange to the debtor is that he is entitled to a rebate or discount on such an early payment. A debtor earns a rebate which is again to him. The purpose and benefit of retiring a bill of exchange to the creditor is to ensure the payment before maturity.

"A bill of exchange is an instrument in writing containing an unconditional order signed by the maker, directing a certain person to pay a certain sum of money only to, or to the order of, a certain person or to the bearer of the instrument." (Section 5 of the Negotiable Instruments Act, 1881).
Advantages of Bills of Exchange: The following advantages accrue from bills of exchange:
(i) Purchase and sale of goods on credit:
With the help of bills of exchange, goods can be sold and purchased on credit without difficulty since the bills of exchange contains an unconditional promise to pay.
(ii) Discounting facility:
The bills of exchange can be discounted at a bank, so that the firm allowing the credit can receive cash immediately without the debtor having to pay before time.
(iii) Easy to recover the amount:
If a bill of exchange is dishonoured, it would be easier to recover the amount legally than in the case of an ordinary debt.
(iv) Endorsement:
A bill of exchange can be endorsed to other parties; thus they serve almost the same purpose as cash.
(v) Certainty as to payment:
The date of payment is certain, so the firm which has to pay and that which has to receive the amount, can thus plan cash operations.
(vi) No reminder to debtor:
The recovery of the debt is possible without having to remind the debtor.
(vii) Convenient means of remittance in foreign trade:
In foreign trade, bills of exchange are of great assistance in enabling firms to make and receive payment. It, thus, avoids the risks of carrying the currency to different places of trade.

When the drawer makes the payment of the bill before its due date, it is called retiring the bill. In such case, the holder of the bill usually allows him discount, technically called 'Rebate'. Such rebate is calculated at a specific rate per annum for the period the payment is being made too early. The rebate is a gain to the party making the payment and an expense to the party receiving the payment.
Transaction
If y retires this acceptance before the due date to X.

The below mentioned is the proforma of Bills Payable book.

Sometimes, the acceptor of the bill foresees that if may be difficult to meet the obligation of the bill on maturity and may therefore approach the drawer with the request for extension of time for payment. If its is so the of bill is to be cancelled and the fresh bill with new terms of payment is to be drawn and duly accepted and delivered twice is called renewal of the bill since the cancellation of bills mutually agreed upon noting of the bill is not required.

A bill is said to have been dishonoured when the acceptor fails to make the payment on the date of maturity. In this situation liability of the accepted is restored. Therefore, the entries made on the receipt of the bill should be reversed.

(i) Bills of exchange,
(ii) Promissory Note.