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Question
Bansal Heavy machine Ltd purchased a machine worth Rs 3,80,000 from Handa Trader. Payment was made as Rs 50,000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 110 each. Give journal entries to record the above transaction.
Solution
| Book of Bansal Heavy Machine Ltd. | ||||
| Date | Particulars | L.F | Debit Amount Rs | Credit Amount Rs |
|
Machinery A/c ...Dr To Cash A/c To Handa Traders (Machine purchased from Handa Traders paid Rs 50,000 in cash immediately) |
3,80,000 |
3,30,000 50,000 |
||
|
Handa Trader ...Dr To Share Capital A/c (3,000 × 100) To Securities premium (3,000 × 10) (3,000 share issued at Rs 90 face value of Rs 100 each to Handa Traders in consideration of amount due to him for machinery purchased) |
3,30,000 30,000 |
3,00,000 |
||
Working Notes:
Number of share issued
=`"Amount payable"/"issue price"`
= `"2,70,000"/"90"`
= `3,000 " shares"`
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