alleryBill of ₹50,000 discounted with bank at 12% p.a. for 90 days. Discount and cash received:
ADiscount ₹2,000; cash ₹48,000
BDiscount ₹1,479; cash ₹48,521
CDiscount ₹1,500; cash ₹48,500
DDiscount ₹1,000; cash ₹49,000
Answer & Solution
Correct answer: C. Discount ₹1,500; cash ₹48,500
1. Discount = 50,000 × 12% × 90/360 = 1,500.
2. Cash received = 50,000 − 1,500 = ₹48,500.
3. Bank entry: Bank A/c Dr 48,500; Discount Dr 1,500; To Bills Receivable 50,000.
_Source: ICAI BoS Foundation Paper 1, Ch 6 "Bills of Exchange", §4 discount example_
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