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If the Bill Can be Endorsed to a Creditor

The process of transferring the ownership of the instrument by the drawer to another person is known as endorsement.

The person who endorses the instrument is called the endorser. The person to whom the instrument is endorsed is called the endorsee.

When the bill is endorsed to any other party, the journal entries will be

In the books of the drawer


Note: On the date of maturity, when the bill is met, no entry is required in the books of the drawer because in his books, the Bills receivable account has already been closed.

In the Books of the Drawee

His books remain unaffected. He will pay it on the due date to the holder and the usual entry for payment will be passed. On maturity date

In the books of the endorsee


Note: When the endorsee receives an endorsed bill, he will treat it just like an ordinary bill.


Illustration 3


A bill for ₹ 2, 000 is drawn by X on Y on 1st January, 2012 for 2 months and accepted by the latter. X transfers it to his creditor Z, on 1st February, 2012 on the due date the acceptance is duly met. Record the above transactions in the books of X, Y and Z.

  • The bill is honoured
  • The bill is dishonoured



Journal entries in the Books of X


Journal entries in the books of Y


Journal entries in the books of Z

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