Question

[Ans: No. OJ
Ż Ltd. purchased a machinery from Neeraj Traders worth * 39,600 which payment
made by shares of 10 each.
Make journal entries in the following conditions :
(i) when shares issued at 10% premium, (ii) when shares issued at 10% discount.
ſans: Total of Journal (i) * 79,200, (ii) *83,600]
machine from Prateek Machinery Stores,​

Answer 1

ANSWER : In the books of z Ltd

Machinery a/c ....Dr 39600

To Neeraj traders 39600

( Being machinery purchase from neeraj traders)

ABOVE ENTRY IS COMMON FOR BOTH CASE

Now case no .i payment made in 10% premium of share

First we have to calculate the amt of share

Share is 10 each and 10 % premium

So z Ltd have to paid 39600

We have to find how much no. Of shares issued by z Ltd t

We can find this by some calculations

Which is following

Total amt / each share price

Here total amt is 39600

Share price is 10+10% premium

So use the formula

39600/10+10%

It means 39600/11 = 3600 number of share issued @ 11 each

Here premium amt is rs 1

And 10 is equity share capital

Now passing the entry

Neeraj traders a/c ....Dr 39600

To equity share capital 36000

To security premium reserve 3600

( Being payment made in share)

Now case no. ii

Payment made by share at 10 % discount

Same process which is made above

39600/10-10%

= 39600/9 =4400 shares issued

Neeraj traders a/c...Dr 39600

discount on issue of share a/c Dr 4400

To equity share capital 44000

TOTAL OF CASE 1 = 79200

TOTAL OF CASE 2 = 83600

Hope this will help u