(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.

(i) Renewal of a Bill:
When the acceptor of a bill finds himself in financial difficulty to honour the bill on the due date, he may request the drawer of the bill to cancel the original bill and to draw another bill of the amount plus some interest to extend the time of credit. This process is known as the renewal of a bill.
When a bill is renewed, acceptor will have to pay interest to the drawer for the extended period of credit.
(ii) Noting Charges:
When a bill is dishonoured or not paid on maturity, it is customary for the holder of the bill to get the fact noted on the bill by a notary public. When asked by the holder, the notary public presents the bill before the acceptor for payment and if still the acceptor does not pay, the notary public notes the fact of dishonour and the reason of dishonour of the bill. It is called noting of a bill. For this service, Notary Public charges fee, known as noting charges. At the moment, the charges are paid by the holder and ultimately recoverable from the person who is responsible for dishonour.

"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.

Working Note:
Dis. for whole year = Rs 3,600
Dis. for 3 months = Rs 900
Cash received = Rs 30,000 - Rs 900 = Rs 29,100
Amount of Discount = 30,000 x \(\frac{12}{100}\times \frac{3}{12}\) = 900
Note: On payment of the bill, no entry will be made.