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Solution - Issue at Par and Premium and at Discount

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Sandesh Ltd. took over the assets of Rs.7,00,000 and liabilities of Rs.2,00,000 from Sanchar Ltd. for a purchase consideration of Rs.4,59,500. Rs.8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of `10 each at a premium of 10% in favour of Sanchar Ltd.

Pass necessary journal entries for the above transactions in the books of Sandesh Ltd.

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What do you mean by ‘issue of shares at premium’?

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Samachar India Ltd. took over the assets of Rs 14,00,000 and liabilities of Rs 4,00,000 from News Ltd. for a purchase consideration of Rs 9,19,000. Samachar India Ltd. issued a promissory note of Rs 17,000 payable after 60 days in favour of News Ltd. and the balance amount was paid by issue of equity shares of Rs 100 each at a premium of Rs 25 per share.

Pass necessary Journal entries for the above transactions in the books of Samachar India Ltd.

view solution

GG Ltd has issued 50,000 equity shares of 10 each at a premium of 2 per share payable with application money. The incomplete journal entries related to the issue are given below. You are required to complete these blanks.

                                                                                 Books of GG Ltd

                                                                                          Journal 

DateParticularsL.F.Dr.(Rs.)Cr.(Rs.)

2015

Jan 10

 

 

 

_ _ _ _ _ _ _ _ _ _ _                                                                                                                 Dr

             To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

(Amount received on application for 70,000 shares @ 5 per share including premium)

   

Jan 16

 

 

 

 

 

 

Equity Share Application A/c                                                                                                     Dr

                  To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

(Transfer of application money to share capital securities premium, money refunded for 8,000) shares for rejected application and balance adjusted towards amount due on allotment as shares were allotted on Pro-rata basis)

   

Jan 31

 

 

_ _ _ _ _ _ _ _ _ _                                                                                                                     Dr

                 To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

(Amount due on allotment @ Rs.4 per share)

   

Feb 20

 

 

_ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _                                                                                              Dr

                   To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

(Balance amount received on allotment)

   

April 01

 

 

_ _ _ _ _ _ _ _ _                                                                                                                        Dr

                 To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

(First and Final Call money due)

   

April 20

 

 

 

_ _ _ _ _ _ _ _ _ _                                                                                                                     Dr

Calls – in – arrears A/c                                                                                                               Dr

              To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _

(Money received on First and Final Call)

 

 

1,500

 

 

 

Aug 27

 

 

 

_ _ _ _ _ _ _ _ _                                                                                                                        Dr

               To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _

               To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _

(Forfeited the shares on which call money was not received)

   

Oct 3

 

 

 

_ _ _ _ _ _ _ _ _ _                                                                                                                     Dr

_ _ _ _ _ _ _ _ _ _                                                                                                                     Dr

               To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _

(Re-issued the forfeited shares @ 8 per share fully paid - up)

   
_ _ _ _ _

_ _ _ _ _ _ _ _ __                                                                                                                      Dr

              To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _

(_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ __ )

   
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To provide employment to the youth and to develop Baramula district of Jammu and Kashmir, Jyoti Power Ltd. decided to setup a power plant. For raising funds the company decided to issue 8,50,000 equity shares of Rs.10 each at a premium of Rs.3 per share. The whole amount was payable on application. Applications for 20,00,000 shares were received. Applications for 3,00,000 shares were rejected and shares were alloted to the remaining applicants on pro- rata basis.

Pass necessary journal entries for the above transactions in the books of the company and identify any two values which the company wants to propagate.

view solution

B' Ltd. took over the assets of Rs.14,00,000 and liabilities of Rs.4,00,000 of C Ltd. for a purchase consideration of Rs.9,19,000. Rs.17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of Rs.10 each at a premium of 10% in favour of C Ltd.

Pass necessary journal entries for the above transactions in the books of B Ltd.

view solution
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