Question

20. Z Ltd. purchased building for ? 4.40,000. Half the payment was made in cash and the
remaining by issue of debentures of 100 each at a premium of 10%. Pass the necessary journal entry
​

Answer 1

Explanation:

i. Building a/c Dr 440000

To vendor A/c 440000

ii vendor A/c 440000

To cash A/c 220000

To 10% Debentures A/c 220000

iii Debenture A/c Dr 220000

To 10%Debenture A/c 200000

To securities premium reserve A/c 20000

220000/110=2000