Question

Sona Ltd. purchased machinery costing ₹ 17,00,000 from Mona Ltd. Sona Ltd. paid 20% of the amount by cheque and for the balance amount issued Equity Shares of ₹ 100 each at a premium of 25%. Pass necessary Journal entries for the above transactions in the books of Sona Ltd .Show your working notes clearly.

Answer 1

$Number of shares = purchase consideration/ face value of share +premium \\= 13,60,000/100 +25 = 10,880 shares \\share capital issued = 10,880 *100 = 10,88,000\\securities premium = 10,88,000 * 25 = 2,72,000$