K owes ` 60,000 to Z. The debt is discharged by K on 1st June, 2016 by accepting
two bills of exchange drawn on him by Z—one for 40,000 at 2 months and the other for 20,000 at 3 months. The first bill is endorsed in favour of R, a creditor,
in full settlement of his debt for 42,000. The second bill is discounted with the bank at 15% p.a. on 4th June. Both the bills were dishonoured, the noting charges in each case being 600. On 5th September, K agreed to accept another bill for
the total amount including interest @ 18% p.a. payable after 3 months. On the
due date the bill was dishonoured. K was declared insolvent and a final dividend
@ 30% was realised from his estate.
Show the Journal entries in the books of Z and K.