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Question
Deepak Ltd purchased furniture of ₹ 2,20,000 from M/s. Furniture Mart. 50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchanged and for the balance the company issued 9% Debenture of ₹ 100 each at a premium of 10% in favour of M/s. Furniture Mart.
Pass Journal entries in the books of Deepak Ltd.
Solution
Books of Deepak Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Furniture A/c |
Dr. |
|
2,20,000 |
|
|
|
To Furniture Mart |
|
|
2,20,000 |
|
|
|
(Furniture purchased from Furniture Mart) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture Mart |
Dr. |
|
1,10,000 |
|
|
|
To Bills Payable A/c |
|
|
1,10,000 |
|
|
|
(Bill accepted from Furniture Mart against 50% payment) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Furniture Mart |
Dr. |
|
1,10,000 |
|
|
|
To 9% Debenture A/c |
|
|
1,00,000 |
|
|
|
To Securities Premium A/c |
|
|
10,000 |
|
|
|
(Issued 1,000 9% Debentures of Rs 100 each at a premium of 10% to Furniture Mart) |
|
|
|
|
Working Note:
No.of. debentures to be issued =
`"Purchase Consideration"/"Issue Price"`
`= 110000/(100 + 10) = 110000/110`
= 1000 debentures
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