sooraj limited company purchased a machine worth Rs.2,30,000 from blue star limited. payment was made as to Rs.20,000 by cash and the remaining amount by issue of equity shares of the face value of Rs.20 each fully paid at an issue price of Rs.21 each. show the number of shares to be issued and make the journal entry.
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no of shares to be issued=(230000-20000)/21
=10000 shares
Journal entry in the books of Sooraj Limited Company
Machine account debited 230000
to Sooraj Limited account 230000
Sooraj limited account debited 230000
to cash account 20000
to share capital account 2,00,000
(10000shares×20 Rs pershare)
to security premium account 10000
(10000 shares ×1 Rs per share)
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