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. 

Answer 1

Books of Jain Ltd.
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Building A/c	Dr.		10,00,000
	To Gupta Ltd.				10,00,000
	(Building purchased from Gupta Ltd.)
	Gupta Ltd.	Dr.		1,00,000
	To Bank A/c				1,00,000
	(10% of amount paid through cheque to Gupta Ltd.)
	Gupta Ltd.	Dr.		9,00,000
	Discount on Issue of Shares A/c	Dr.		1,00,000
	To Equity Share Capital				10,00,000
	(Issue of 1,00,000 equity shares issued of Rs 10 each at a discount of Re 1)