Creditors

Patel received from one of his customers a bill at three months for ~ 16,000. He discounted it on the same day at 10 per cent per annum with his bankers. On the date of maturity, the bill was dishonoured and the bank incurred noting charges of ~ 80. However, the customer paid him ~ 2,000 plus noting charges plus interest for three months amounting to ~ 420 in cash and accepted a fresh bill at three months for ~ 14,000, being the balance amount due from him. Patel gave the second bill to Mr Narayan, one of his creditors. The second bill was duly honoured on the due date. Record these transactions in the Journal of Patel. [C.A. Entrance Adapted]