Explanation

(c ) In case of accommodation bills, the additional entry that is to be passed other than the usual entries passed with regard to trade bills in the books of the drawer is in respect of (c ) remitting or receiving the amount at the time of discounting the bill and honouring the bill at maturity. The entries passed are the same in case of discounting the bill with the bank A. and no additional entry is passed except for sending the share of proceeds to the drawee. On payment of the bill on due date B. no additional entry is passed in the books of the drawer. If the bill is sent to the bank for collection, D. the purpose behind the accommodation bill is defeated. However, no additional entry is required to be passed at the time of sending the bill to the bank for collection D.. Thus, C. is the correct answer.