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Question
Alankrit Ltd. purchased machinery of ₹ 10,00,000 from Grand Iron Works Ltd. and paid as follows:
(a) Issued 50,000 Equity Shares of ₹ 10 each at a premium of ₹ 2.
(b) Gave an acceptance of ₹ 3,00,000 payable after 3 months; and
(c) Balance by issuing post-dated cheque of two months of ₹ 1,00,000.
Pass the Journal entries in the books of Alankrit Ltd. and Grand Iron Works Ltd.
Solution
In the books of Alankrit Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
i) |
Machinery A/c |
Dr. |
10,00,000 |
|
|
|
|
To Grand Iron Works Ltd. |
|
|
10,00,000 |
|
|
|
(Being machinery purchased on from Grand Iron Works Ltd.) |
|
|
|
|
|
|
|
|
|
||
|
ii) |
Grand Iron Works Ltd. |
Dr. |
10,00,000 |
|
|
|
|
To Share Capital A/c (50,000 × 10) |
|
|
5,00,000 |
|
|
|
To Securities Premium Reserve A/c (50,000 × 2) |
|
|
1,00,000 |
|
|
|
To Bills Payable A/c |
|
|
3,00,000 |
|
|
|
To Bank A/c |
|
|
1,00,000 |
|
|
|
(Being shares issued, bill accepted and post-dated cheque issued) |
|
|
In the books of Grand Iron Works Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
i) |
Alankrit Ltd. |
Dr. |
10,00,000 |
|
|
|
|
To Sales A/c |
|
|
10,00,000 |
|
|
|
(Being machinery sold to Alankrit Ltd.) |
|
|
|
|
|
|
|
|
|
||
|
ii) |
Investment A/c |
Dr. |
6,00,000 |
|
|
|
|
Bills Receivable A/c |
Dr. |
3,00,000 |
|
|
|
|
Cheques-in-Hand A/c |
Dr. |
1,00,000 |
|
|
|
|
To Alankrit Ltd. |
|
|
10,00,000 |
|
|
|
(Being shares, acceptance and post-dated cheque received as against machinery) |
|
|
|
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