Question

Newton Ltd. purchased a Machinery from B for ₹ 5,76,000 to be paid by the issue of 9% Debentures of ​₹ 100 each at 4% discount. Journalise the trasactions.

Answer 1

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

Explanation:

Given,

Newton Ltd. purchased a Machinery from B for ₹ 5,76,000 to be paid by the issue of 9% Debentures of ​₹ 100 each at 4% discount.

Calculation of Number of Debentures Issued

Number of Debentures issued

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

$=\frac{5,76,000}{100-4}=\frac{5,76,000}{96}=6,000 \text { debentures }$

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