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Question
Sona Ltd. purchased machinery costing ₹ 17,00,000 from Mona Ltd. Sona Ltd. paid 20% of the amount by cheque and for the balance amount issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries for the above transactions in the books of Sona Ltd .Show your working notes clearly.
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Solution
Journal
In the Books of Sona Ltd.
|
Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
|
|
|
Machinery A/c |
Dr. |
|
17,00,000 |
|
|
|
To Mona Ltd. |
|
|
|
17,00,000 |
|
|
(Machinery purchased on credit from Sona Ltd.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mona Ltd. |
Dr. |
|
3,40,000 |
|
|
|
To Bank A/c |
|
|
|
3,40,000 |
|
|
(20% amount paid through cheque) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Mona Ltd. (17,00,000 – 3,40,000) |
Dr. |
|
13,60,000 |
|
|
|
To Equity Share Capital* |
|
|
|
10,88,000 |
|
|
To Securities Premium A/c* |
|
|
|
2,72,000 |
|
|
(Issued 10,880 shares of Rs 100 each to Mona Ltd. at 25% Premium) |
|
|
|
|
Working Notes: *
No.of.shares = `"Purchase consideration"/"Face value of shares + Premium"`
`= 1360000/(100 + 25)` = 10880 shares
Therefore , Amount of share Capital Issued = 10880 × 100 = Rs 1088000
Amount of securities Premium = Rs 1088000 × 25% = Rs 72000
