$[$Mysore$,$

B$.$Com., Nov. $1988]$

$20.$ On $1-5-98$ Chandran drew a bill of exchange payable after $3$ months on Balan for Rs$.6,000.$ Chandran got the bill discounted with his bankers at $18\%$ p$.$a$.$ On $4-5-98$ on the due date of the bill. Balan dishonoured the bill and Rs$.10$ as noting charges was paid by the Bank. Chandran agrees to accept Rs$.2,170$ in cash $($Rs$.170$ for noting charges and interest$)$ and draw another Bill of exchange for Rs$.4\mathrm{.}000$ payable afler $2$ months. On the due date of the Second bill, Balan approached chandran and asked again for renewal of the bill for a further period of $3$ months. Chandran agreed to his request and received Rs$.240$ from Balan as interest in cash. The last bill was met at maturity by Balan.

Draft Journal entries in the Books of Chandran and Balan.