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Question
Joy Ltd. company bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of ₹ 100 each at a discount of 10%.
Give Journal entries.
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Solution
Books of Joy Limited
Journal
|
D ate |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
|
Building A/c |
Dr. |
|
9,00,000 |
|
|
|
To Vendor A/c |
|
|
9,00,000 |
|
|
|
(Building purchased) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Vendor A/c |
Dr. |
|
9,00,000 |
|
|
|
Discount on Issue of Debentures A/c |
Dr. |
|
1,00,000 |
|
|
|
To 10% Debentures A/c |
|
|
10,00,000 |
|
|
|
(Issued 10,000, 10% debentures at 10% discount) |
|
|
|
|
Working Note:
No.of. debentures to be issued =
`"Purchases Consideration" / "Issue Price" = 900000/90 = 10000 "debentures"`
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