On 1st May, 2023, Merchant & Co. sold goods to AB & Co. of ₹ 50,000 and drew upon them a bill at 3 months for the amount. AB & Co. accepted the draft on presentation. When the bill was to mature, AB & Co. expressed their inability to meet it and offered to pay Merchant & Co. agreed to the proposal and bill was renewed. On maturity, the bill was duly met.
Pass entries in the books of both the parties to record the above transactions.