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Question
Jain Ltd. purchased Building for Rs 10,00,000 from Gupta Ltd. 10% of the payable amount was paid by a cheque drawn in favour of Gupta Ltd. The balance was paid by issue of Equity Shares of Rs 10 each at a discount of 10%.
Pass necessary Journal Entries in the books of Jain Ltd.
Solution
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Books of Jain Ltd. |
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Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
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Building A/c |
Dr. |
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10,00,000 |
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To Gupta Ltd. |
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10,00,000 |
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(Building purchased from Gupta Ltd.) |
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Gupta Ltd. |
Dr. |
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1,00,000 |
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To Bank A/c |
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1,00,000 |
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(10% of amount paid through cheque to Gupta Ltd.) |
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Gupta Ltd. |
Dr. |
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9,00,000 |
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Discount on Issue of Shares A/c |
Dr. |
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1,00,000 |
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To Equity Share Capital |
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10,00,000 |
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(Issue of 1,00,000 equity shares issued of Rs 10 each at a discount of Re 1) |
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Notes
Calculate of number of shares to be issued
`"No.of shares"= "Purchase Consideration" /"Issue Price"`
`(9,00,000)/(Rs 9)=1,00,000 '"Shares"`
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| I EQUITY AND LIABILITIES | |||
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