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Question
'Sangam Woollens Ltd.', Ludhiana, are the manufacturers and exporters of woollen garments. The company decided to distribute free of cost woollen garments to 10 villages of Lahaul and Spiti District of Himachal Pradesh. The company also decided to employ 50 young persons from these villages in its newly established factory. The company issued 40,000 Equity Shares of ₹ 10 each and 1,000, 9% Debentures of ₹ 100 each to the vendor for the purchase of machinery of ₹ 5,00,000. Pass necessary Journal entries.
Solution
In the books of Sangam Woollens Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
|
Machinery A/c |
Dr. |
5,00,000 |
|
|
|
|
To Vendor A/c |
|
|
5,00,000 |
|
|
|
(Being machinery purchased from a Vendor) |
|
|
|
|
|
|
|
|
|
||
|
|
Vendor A/c |
Dr. |
5,00,000 |
|
|
|
|
To Equity Share Capital A/c (40,000×10) |
|
|
4,00,000 |
|
|
|
To 9% Debentures A/c (1,000×100) |
|
|
1,00,000 |
|
|
|
(Being equity shares and 9% Debentures issued as purchase consideration) |
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|
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