It is maintained like a Bills receivable book. Its meant to record all the detail relating to the bill accepted by a person or a party, Which are retained or being use in the future, in case of need.
The posting from this books are made to the debit of the account of every creditor to whom acceptance has been given and the periodical total of the books are credited to the bills payable account in the ledger.
The Bills payable Nc representing as does the liability of the acceptor in respect of bills accepted by him, always has a credit balance, if any. The credit balance of this account on any particular date must be the same as the total amount worth of bills payable yet to be presented for payment as ascertained from the Bills payable Book.

When large no. of bills are drawn and accepted, their recording by means of journal entry for every transaction relating to the bills became a very cumbers one and time consuming exercise. It is then advisable to record them separately in special subsidiary books. The bills Receivables in the bills receivable books and the bills payable in the Bills Payable Book. The reason for the use of subsidiary books for cash, purchases, sales. An important point in connection with bill receivable & Bills payable books is to record the transactions relating to drawing & acceptance of bills, all other transactions that they only do not record the entire range of transactions relating to the bills.
Example: Relating to bills discounting, Endorsement, retirement, renewal etc. a passing reference in these books and the entries relating there to are recorded as usual in the journal. It may be noted that the entry relating to honouring of bills appear in cash book.
Bills receivable Book:
It has been designed as a summary of information regarding a duty accepted bill received by a drawer. All the details of the bill date, acceptor's name, amount, term, place of payment, etc ver entered in the bills receivable book for presentation & further reference. The bill receivable book, like any other subsidiary books is totalled periodically. This total is debited to the "Bills receivable Account" whereas the account of every individual debtor for whom the bills received is credited in the ledger. The bills receivable account is the account of an asset and would always have a debit balance.

There are instances when a bill of exchange is arranged to be retired before the due date by mutual understanding between the drawer and the drawee. This happens when the acceptors of this bill has funds at his disposal and maker a request to the drawer holder to accept the payment of the bill before its maturity. If the holder agrees to do so, the bill is said to have been retired.
To encourage the retirement of the bill, the holder allows some discounts called rebate on bills for the period between date of retirement & maturity. The rebate is calculated at a certain rate of interest.
The accounting treatment of the retired bill under rebate is similar to accounting treatment when a bill is dishonoured by the acceptor on the due date in the ordinary course. The only difference between the two releases to the granting of rebate the following journal entries are recorded-
In the books of holder -
Our retiring the acceptance and rebate allowed-

Cash A/c	Dr.
Rebate  A/c	Dr.
To Bills Receivables A/c
In the books of acceptor-
Bills Payable A/c	Dr.
To Cash A/c
To Rebate A/c

Distinction between a Bill of Exchange and a Promissory Note

Sr. No.	Basis of Difference	Bill of Exchange	Promissory Note
(i)	Parties	There may be three parties to it, viz, the drawer, the acceptor and the payee.	There are only two parties to it-the maker who draws the note and signs it and the payee to whom the amount is payable
(ii)	Drawer	It is drawn by the creditor.	it is drawn by the debtor.
(iii)	Order and Promise	It is an order to payment.	it is a promise to make payment.
(iv)	Acceptance	It needs acceptance by the drawee.	It does not need acceptance. The liability of the drawer (maker) is primary.
(v)	Liability	The liability of the drawer is secondary. He will be liable if the acceptor only does not pay.	Noting is not necessary in case of a promissory note.
(vi)	Payee	Drawer can be the payee of the bill Maker cannot be the payee of it.	Whether it is local or foreign. Stamps have to be fixed in any case.
(vii)	Nothing	`It is better to get it.
(viii)	Copies	In case of local bills only one copy is prepared and incase of foreign bills three copies are prepared.
(ix)	Stamps	There is no need of fixing the stamps on demand but other wise stamps would be necessary.

Dishonour means a situation when the acceptor of the bill refuses to pay the amount or is otherwise unable to do so, say, because of insolvency. In such a case, the holder of the bill can recover the amount from any of the previous endorsers or the drawers to establish the fact of a proper presentation & dishonour, the bill is generally got noted. The endorsement is made either on the bill or on a separate paper attached to the bill called 'allouge'. It is given to a person called notary public, appointed by government. The notary public will present the bill for payment, if payment is received it will be given to the holder, otherwise, the fact of dishonour will be noted on the face to the bill. This act is called noting. There is a shall charge for service of the notary public payable by the holder, it is called "Noting charges" and may be recovered from the party responsible for the dishonour. Noting will visit of the following-
(i) That the bill has been dishonoured, in fact;
(ii) The date of the dishonour;
(iii) The reason given, if any, for the dishonour, and,
(iv) The changes made by the notary public.
Entries on the Dishonour of a Bill: If the bill dishonoured, the party which gave the bill will be debited with the amount of the bill and noting charges, since it is now responsible. The back or the endorsee will claim payment and therefore their account will be credited.
Drawee's Books: The entry for the dishonour of the bill in the books of drawee would depend upon the circumstances of each case-
(i) When the bill is retained by the drawer till maturity and dishonoured on due date-

Drawee's A/c	Dr.
To Bill receivable A/c		[The amount of Bill]
To Cash A/c		[Noting charges]

(ii) When the bill is discounted with the bank is dishonoured, the entry will be-

Drawee's A/c	Dr.
To Bank A/c		[The amount of the Bill  and noting charges]

(iii) When the bill is endorsed to the endorsee and is dishonoured, the entry will be-

Drawee's A/c	Dr.
To endorsee's A/c		[The amount of the bill  & noting charges]

(iv) When the bill is being sent to the bank for collection as is dishonoured-

Drawee's  A/c	Dr.
To Bill sent for collection   A/c		[The amount of Bill]
To Bank A/c		[Amount of noting charges]

Drawee's Books- If the bill is dishonoured, the liability to the creditor concerted will be restored. In addition to the amount of the bill, noting charges, if paid for getting the bill noted, will also being payable to thecreditors Therefore, his account should be credited with the amount of bill plus the noting charges, if any, the amount of the bill will be debited to noting charges Nc. The entries will be-

Bills Payable  A/c	Dr.	[The amount of Bill]
Noting charges  A/c	Dr.	[Noting charges, if any]
To creditors A/c		[Amount of the bill + Noting charges]

In the Books of A Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan.01	Bills Receivable A/c	Dr.		20,000
	To B's A/c				20,000
	(Being acceptance received)
Jan. 1	B's A/c	Dr.		20,000
	To Bills Payable A/c				20,000
	(Being acceptance given)
Jan. 4	Bank A/c	Dr.		19,100
	Discounting charges A/c	Dr.		900
	To Bills Receivable A/c				20,000
	(Being the bills discounted)
April 4	Bills Payable A/c	Dr.		20,000
	To Cash  A/c				20,000
	(Being the acceptance met)

In the Books of B Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan. 01	A's A/c	Dr.		20,000
	To Bills Payable A/c				20,000
	(Being acceptance given)
Jan. 01	Bills Receivable A/c	Dr.		20,000
	To A's A/c				20,000
	(Being acceptance received)
Jan. 04	Bank A/c	Dr.		19,100
	Discounting charges A/c	Dr.		900
	To Bills Receivable A/c				20,000
	(Being bills discounted)
April 04	Bills Payable A/c	Dr.		20,000
	To Cash A/c				20,000
	(Being acceptance met)

In the Books of Niru Journal

Date	Particulars		L.F.	Amount Dr. (Rs)	Amount Cr. (Rs)
2015 Jan. 15	Shibu	Dr.		30,000
	To Sales A/c				30,000
	(Being the goods sold to Shibu)
Jan. 15	Bills Receivable A/c	Dr.		30,000
	To Shibu				30,000
	(Being the bills received from Shibu)
Jan. 31	Bank A/c	Dr.		29,250
	Discounting Charges A/c	Dr.		750
	To Bills Receivable  A/c				30,000
	(Being the bills receivable discounted)
April 18	Shibu	Dr.		30,000
	To Bank A/c				30,000
	(Being the bill dishonoured)
April 18	Shibu	Dr.		500
	To Interest A/c				500
	(Being the interest due)
April 18	Cash A/c	Dr.		10,500
	To Shibu				10,500
	(Being the cash received from Narain)
April 18	Bills Receivable A/c	Dr.		20,000
	To Shibu				20,000
	(Being the new bill received)
April 18	Kamal	Dr.		20,000
	To Bills Receivable A/c				20,000
	(Being the bill endorsed to Kamal)

In the Books of A Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan. 01	B's A/c	Dr.		10,000
	To Sales A/c				10,000
	(Being sold goods on credit)
Jan. 01	Bills Receivable A/c	Dr.		10,000
	To B's A/c				10,000
	(Beingacceptance received)
March 04	Cash A/c	Dr.		9,950
	Rebate A/c	Dr.		50
	ToBills Receivable A/c				10,000
	(Being amount received on bill and rebate allowed)

In the Books of B Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan. 01	Purchases A/c	Dr.		10,000
	To A's A/c				10,000
	(Being purchase of goods on credit)
Jan. 1	A's A/c	Dr.		10,000
	To Bills Payable A/c				10,000
	(Being A's bill accepted)
March 4	Bills Payable A/c	Dr.		10,000
	To Cash A/c				9,950
	To Rebate A/c				50
	(Beingacceptance retired under rebate)

In the Books of B Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan.1	Purchases A/c	Dr.		5,000
	To A				5,000
	(Being goods purchased on credit)
Jan. 1	A	Dr.		5,000
	To Bills Payable A/c				5,000
	(Being acceptance given)
April 4	Bills Payable A/c	Dr.		5,000
	Noting Charges A/c	Dr.		100
	To A				5,100
	(Being the bill dishonored and noting charges paid by A)

In the Books of A Journal Entries

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
2014 Jan. 01	B	Dr.		5,000
	To Sales A/c				5,000
	(Being goods sold on credit)
Jan. 01	Bills Receivable A/c	Dr.		5,000
	To B				5,000
	(Being acceptance received)
Jan. 04	Bank A/c	Dr.		4,900
	Discounting charges A/c	Dr.		100
	To Bills Receivable A/c				5,000
	(Being the bill discounted)
April 04	B	Dr.		5,100
	To Bank A/c				5,100
	(Being the bill dishonored and Bank paid f 100 as noting charges)

In the Books of B & Co. Journal Entries

Date	Particulars		L.E.	Debit Amount (Rs)	Credit Amount (Rs)
	Bills Receivable A/c	Dr.		60,000
	To C & Co's A/c				60,000
	(Being their acceptance received)
	Bills sent for Collection A/c	Dr.		60,000
	To Bills Receivable A/c				60,000
	(Being the bill sent to bank for collection on due date)
	Bank A/c	Dr.		60,000
	To Bill sent for Collection A/c				60,000
	(Being bill sent for collection and honoured)