Coupon Accepted Successfully!


Renewal of Bill

Sometimes, the acceptor of a bill finds unable to meet his acceptance on the due date. So, he may approach the drawer of the bill before the maturity date arrives, to cancel the old bill and draw a new bill with the extended date.

The acceptor in this case will, of course, have to pay interest for the extended period.

Thus, the cancellation of the old bill in return for a new bill (which may include interest or the interest may be paid by cash also) for an extended period is called “renewal of a Bill of Exchange”.

The journal entries will be:


Illustration 5


X draws a bill for ₹ 2,000 on Y who accepts and returns it to X. When the bill was about to mature, Y expressed his inability to meet it and requested X to renew it. X agrees, but adds ₹ 100 to the new bill as interest. Give necessary journal entries in the books of X and Y when the bill is renewed.



Journal entries in the books of X

Journal entries in the books of Y

Test Your Skills Now!
Take a Quiz now
Reviewer Name