Question

1 Zee Ltd purchased plant and machinery for rs 2,00,000 payable as ? 40,000 in cash and
balance by allotment of 6% debentures of rs 1,000 each at a premium of 25%. Journalise the
above transactions.
​

Answer 1

Plant and machinery A/c. Dr. 2,00,000

To Cash. 40,000

To 6% Debentures A/c. 1,28,000

To Securities Premium Reserve. 32,000

Answer 2

Answer:

                                                     Journal

                                       In the books of Zee Ltd

Plant and machinery A/c. Dr.                              2,00,000

                                          To Cash.                                                  40,000

                                           To 6% debentures A/c.                         1,28,000

                                           To Securities Premium Reserve.           32,000

(being purchased plant and machinery for rs 2,00,000 payable as  40,000 in cash and balance by allotment of 6% debentures of rs 1,000 each at a premium of 25%.)

Explanation:

1) Value of plant and macinery                                   2,00,000

  Paid in cash                                                                 40, 000

  Balance  = 2,00,000 - 40,000 = 1,60,000

  Amount Payable by debentures and premiun = 1,60,000

2) Total Debentures to be issued of rs 1000 at a premium of 25% is $\frac{1,60,000}{1250}$  = 128

3) Amount payable by debentures = 1000 x 128 = 1,28,000

   To be paid by securities premium reserve = 1,60,000 - 1,28,000 =  32,000.

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