Endorsed Bill Dishonoured Journal Entries

Journal entries of bill endorsed dishonoured are just like bill discounted dishonoured. Only here is the endorsee instead bank which is the new holder of bill and past holder endorse the bill to new holder. Endorsee will go to drawee or acceptor for getting his money of bill on maturity. If he will reject, he will go to notary public to note it and give fees and will make the asset to his endorser and endorser if drawer will make the asset to his drawee because now drawee is direct responsible to pay money.

1. When Drawee Do not Pay the Value of Bill and Bill Will Dishonour

In the books of Endorsee

Endorser Account Debit

B/R account Credit

Bank Account Credit ( Noting charges of dishonour bill )

In the Books of Endorser

Drawee Account Debit ( amount payable + noting charges

Endorsee Account Credit



In the Books of Drawee 

B/P Account Debit

Noting Charges Account Credit

Endorser Account Credit

2. When Drawee Pay the Money

In the Books of Drawee 

Endorser Account Debit

Bank Account Credit

In the Books of Endorser 

Endorsee Account Debit

Bank Account Credit

In the Books Endorsee 

Bank Account Debit

Endorser Account Credit

( If you study the books of drawee, drawer or endorser and endorsee, you will find that money is transfer from one account to another and at the end it will receive endorsee. Endorsee not just receive his money but in this money, he will get his noting charges. So, both in the books of drawee and drawer, bank account will credit and in the books of endorsee, bank account will debit. Amount will same because drawee has decrease the liability of drawer and drawer has decreased the liability of endorsee and endorsee by passing about entry has increase his current asset by debit his bank account in journal entry. )


Related Contents 

1. Renewal of Bill Journal Entries 
2. Bill Dishonour Journal Entries 
3. Bill Sent for Collection with Bank Journal Entries 
4. Bill Discounting with Bank Journal Entries
5. Journal Entries for Endorsement of Bill
6. Journal Entries of Bill of Exchange
7. Accounting of Bill of Exchange 

Reference

11th Class Accounting eBook