Renewal of Bills – Second Chance! 🔄

Scenario:

• Simran cannot pay on due date.
• She requests Raj: "Please cancel the old bill and take a new bill for 2 more months."
• Raj says: "Okay, but I will charge Interest for the extra time."

Process:

1. Cancel the Old Bill (Dishonour Entry).
2. Charge Interest (Due from Drawee).
3. Receive Part Payment (If any).
4. Draw New Bill (For Balance + Interest).

Journal Entries (Drawer's Books) 📝

1. Cancel Old Bill:

Drawee A/c ...Dr.
    To B/R A/c

2. Charge Interest:

Drawee A/c ...Dr.
    To Interest A/c (Income)

3. Receive Part Payment (Optional):

Cash A/c ...Dr.
    To Drawee A/c

4. New Bill:

New B/R A/c ...Dr.
    To Drawee A/c

Quiz Time! 🎯

💡 Final Wisdom: "Renewal is a win-win. The Buyer gets time, the Seller gets Interest. But trust is shaken slightly." 🤝⚠️

Next up: Retiring under Rebate - Paying early! 🏃‍♂️