Question

On 1^st April, 2022, Lighthouse Ltd. purchased land from Bricks Ltd. The payment was made on the same day by:

1. Issuing a bank draft for ₹ 2,00,000.
2. Drawing a Promissory Note in favour of Bricks Ltd. for ₹ 10,00,000.
3. Issuing 8,000, 10% Debentures of ₹ 100 each at par, redeemable at a premium of 10% after three years.

You are required to pass necessary journal entries in the books of Lighthouse Ltd. on the date of purchase of land.

Answer 1

In the books of Lighthouse Ltd. Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2022
April 1	Land A/c     ...Dr.		38,00,000
	To Bricks Ltd.			38,00,000
	(Land purchased from Bricks Ltd.)
April 1	Bricks Ltd.     ...Dr.		38,00,000
	Loss on issue of Debentures A/c    ...Dr.		80,000
	To Bank A/c (Cheque)			20,00,000
	To Accounts payable A/c			10,00,000
	To 10% Debentures A/c (8,000 × 100)			8,00,000
	To Premium on Redemption of Debentures A/c			80,000
	(Payment made to Brick's Ltd.)