Received a cheque from Maruti for Rs. 1,10,580 after deduction of 3% cash discount . The cheque was sent for collection and was dishonoured by the bank. How will you record the dishouour of cheque ? Which values are not followed in this case ?

Explanation

It will be recorded in the Cash Book as follows :
(i) By Mrauti ( Rs. 1,10,580 will recorded in Bank Column) .
(ii) Entry for withdrawing discount will be passed through Journal as follows :
Maruti `" "` Dr. 3,420
`" "`To Discount Allowed A/c `" "` 3,420.