Question

7. Jharkhand Ltd. was registered with a capital of 10,00,000 divided into shares of 10.
Company Purchased a machine from Bihar Ltd. for 1,50,000. Jharkhand Ltd. issued
equity shares of 10 each fully paid in payment of claim.
Pass Journal Entries in the books of Bihar Ltd.
Ans. No of Enuity Shares to be Issued 15,000]​

Answer 1

Answer:

(1) Machinery a/c. Dr ₹1,50,000

To Bihar Ltd. ₹1,50,000

(Being machinery purchased)

(2) Bihar a/c. Dr ₹1,50,000

To Equity Share Capital a/c. ₹1,50,000

(Being the purchase consideration satisfied by issuing 15,000 shares @10 per share issue at par as per Board's Resolution No.... Dated....)

Explanation:

Workings -

No. of shares issued = ₹1,50,000/₹10

= ₹15,000

Answer 2

WORKING NOTE

1. No of share to be issued=

payable Amount / issue price per share

150000 / 10 = 15000

journal entries

1 . machinery a/c Dr 150000

To Bihar Ltd. 150000

2. Bihar Ltd. a/c. Dr 150000

To Equity share capital a/c 150000