Question

Pass necessary journal entries for the following transactions in the books of Gopal Ltd:

Purchased furniture for Rs 2,50,000 from M/s Furniture Mart. The payment to M/s Furniture Mart was made by issuing equity shares of Rs 10 each at a premium of 25%.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Furniture A/c     ...Dr.		2,50,000
	To M/s Furniture A/c			2,50,000
	(Being furniture is purchased from M/s Furniture mart for Rs 2,50,000)
2.	M/s Furniture Mart A/c     ...Dr.		2,50,000
	To Equity share capital A/c			2,00,000
	To Securities Premium A/c			50,000
	(Being issue of 20,000 shares at Rs 10 each at a premium of 25%)

Working Note:

Calculation of Number of shares to be issued (at Premium of 25%)

No. of shares = `"Purchase Price"/"Issue Price" = 250000/(12.5(10+2.5))` = 20000 share