Question

Deepak Ltd purchased furniture of ₹ 2,20,000 from M/s. Furniture Mart. 50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchanged and for the balance the company issued 9% Debenture of ₹ 100 each at a premium of 10% in favour of M/s. Furniture Mart.
Pass Journal entries in the books of Deepak Ltd.

Answer 1

Deepak Ltd. purchased furniture of Rs.2,20,000 from M/s. Furniture Mart. 50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchange and for the balance the company issued 9%Debentures of Rs.100 each at a premium of 10% in favour of M/s. Furniture Mart. Pass Journal entries in the books of Deepak Ltd.Read more on Sarthaks.com - https://www.sarthaks.com/108472/deepak-ltd-purchased-furniture-of-rs-2-20-000-from-m-s-furniture-mart-50-of-the-amount

Answer 2

The necessary Journal entries in the books of the company are calculated and prepared below:

Explanation:

Given,

Deepak Ltd purchased furniture of ₹ 2,20,000 from M/s. Furniture Mart.

50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchanged and for the balance the company issued 9% Debenture of ₹ 100 each at a premium of 10% in favour of M/s. Furniture Mart.

Calculation of Number of Debentures Issued

Number of Debentures issued

$=\frac{\text { Purchase Consideration }}{\text { Issue Price }}$

$=\frac{1,10,000}{100+10}=\frac{1,10,000}{110}=1,000 \text { debentures }$

The necessary Journal entries in the books of the company are calculated and prepared below: