Question

(a) Bharat Limited purchased plant and machinery for 20,00,000 rupees from Delhi machines limited by paying 5,00,000 Rupees by cheque and balance by issue of 11% debentures of rupees 100 each at a premium of 20%. Pass necessary entry in the books of Bharat Ltd. for the above transactions. Pass necessary entries in the books of Bharat Limited for the above transactions.

Answer 1

Answer:

THIS IS THE ANSWER

Explanation:

Answer 2

Answer:

Particulars                                                   Dr                                 Cr

Plant and machinery A/C                     Rs 20,00,000              

To Delhi machines A/C                                                        Rs 20,00,000

Delhi Machines Ltd.A/C                     Rs 5,00,000

To Bank A/C                                                                          Rs 5,00,000

(By cheque)

Delhi Machines Ltd.A/C                     Rs 15,00,000

To 11% Debentures A/C                                                         Rs 12,50,000

To securities reserve                                                             Rs 2,50,000

As debentures of rupees 100 each at a premium of 20%.

So, Issue price of deb. = 100+20% = Rs 120

So,

Calculation of no of debenture issued =

$\frac{Purchase\:Prize}{Isuue\:Prize\:of\:Debt}\\ \frac{1500000}{120}\\ 12,500 \:debenture$

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