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Question
Z Ltd . purchased furniture costing ₹ 2,20,000 from C.D Ltd. The payment was to be made by issue of 9% Preference Shares of ₹ 100 each ata premium of ₹ 10 per share . Pass necessary Journal entries in the books of Z Ltd.
Journal Entry
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Solution
Books of Z Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Assets A/c |
Dr. |
|
2,20,000 |
|
|
|
To C.D Ltd. |
|
|
2,20,000 |
|
|
|
(Assets purchased from C.D Ltd.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
C.D Ltd. |
Dr. |
|
2,20,000 |
|
|
|
To 9% Preference Share Capital |
|
|
2,00,000 |
|
|
|
To Securities Premium A/c |
|
|
20,000 |
|
|
|
(2,000 9% Preference Shares of Rs 100 each issued at 10% premium to C.D Ltd.) |
|
|
|
|
Working Note:
Number of Shares issued=`220000/(100 + 10) = 2000 "Shares"`
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