Model: Rebate on bills discounted As on 31 December 2010, the books of Giant Bank Ltd., include among others, the following balances:
|
Rs. |
|
|
Rebate on Bills Discounted (1 January 2010) |
2,70,000 |
|
Discount Received |
37,50,000 |
|
Bills Discounted and Purchased |
3,65,00,000 |
Throughout the accounting year, the bank’s rate for discounting has been 15%. On Investigation and analysis, the average due date for the bills discounted and purchased is calculated as 14 March 2011. Show the calculation of the amount to be credited to the Bank’s P & L A/c under discount earned for the year 2010. Show also the journal entries required to adjust the above-mentioned accounts.