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Question -

Kumar Ltd. purchased assets of Rs. 6,30,000 from Bhanu Oil Ltd. Kumar Ltd. issued equity share of Rs. 100 each fully paid in consideration. What journal entries will be made, if the shares are issued, (a) at par, and (b) at premium of 20%.



Answer -

Case (a)

Books of Kumar Ltd

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

 

Sundry Assets A/c

Dr.

 

6,30,000

 

 

 

To Bhanu Oil Ltd

 

 

6,30,000

 

(Assets purchased from Bhanu Oil Ltd.)

 

 

 

 

 

 

 

 

(a)

Bhanu Oil Ltd

Dr.

 

6,30,000

 

 

 

To Share Capital A/c

 

 

6,30,000

 

(6,300 shares issued at par to Bhanu Ltd.)

 

 

 

 

 

 

 

 



Case (b)

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

 

Sundry Assets A/c

Dr.

 

6,30,000

 

 

 

To Bhanu Oil Ltd

 

 

6,30,000

 

(Assets purchased from Bhanu Oil Ltd.)

 

 

 

 

 

 

 

 

 

Bhanu Oil Ltd

Dr.

 

6,30,000

 

 

 

To Share Capital A/c

 

 

5,25,000

 

 

To Securities Premium A/c

 

 

1,05,000

 

(5,250 share are issued at 20% premium to Bhanu Ltd. in consideration of assets purchased)

 

 

 

 

 

 

 

 



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