Drawee is the debtor on whom the Bill of Exchange is drawn. Accounting entries for drawee: When bill is received and accepted: Debit Bills Payable Account (or an account name for creditor), Credit Bills Payable. This substitutes for creditor account, showing liability through bill. Acceptance is the drawee's agreement to pay the bill at maturity; communicated by writing "Accepted" and signing on the bill. When bill is honored (paid) at maturity: Debit Bills Payable, Credit Bank Account. When bill is dishonored at maturity: Debit Bills Payable, Credit Bank Account (or Cash, if not used), and record the dishonor and any related penalties. If bill is renewed before maturity: Cancel original bill, create new one, journalize difference in amounts if any. Bills Payable account represents liability to pay the bill at maturity. Early payment of bill is recorded as debit Bills Payable, credit Cash/Bank. If bill amount is modified (increased), the difference is recorded as additional liability. Drawee's honor or dishonor of bill is critical for creditworthiness and future credit terms. Documentation includes maintaining copy of bill, noting acceptance date, tracking maturity, recording timely payment. Journal entries should show clear liability treatment and show proper resolution at maturity. Exam tip: Understand the difference between received and accepted bills; practice honor and dishonor entries; know how bills substitute for payables accounts.