Account

Rita for mutual accommodation of 2 : 1 with Mita draw on the latter two bills of ~ 9,000 and ~ 6,000 for 3 months and 4 months respectively on 5th March, 2014. Both the bills were discounted with the bank on 8th March, 2014 @ 12% p.a. interest. On the due date of the first bill, Rita endorsed Sita’s acceptance of ~ 6,200 to Mita in settlement of her share. This bill was discounted by Mita at a charge of ~ 60. On the due date of the second bill, Mita wanted appropriate share from Rita but the latter was not in a position to give any fund. To settle the problem, Rita issued a promissory note of ~ 4,000 for 3 months in favour of Mita. Mita discounted it immediately for ~ 3,920. This promissory note was dishonoured on the due date at a noting charge of ~ 40. On the same day, Mita collected ~ 1,690 in cash and drew a new bill for two months for ~ 2,400. However, on the due date of this bill, Rita became insolvent. On 10th February 2015, Mita received a first dividend of 20% from the estate of Rita and on 10th March 2015, a second and final dividend of 50% from the estate of Rita through official receiver. Show Mita Account and Rita Account in the books of Rita and Mita respectively.