Question

Alankrit Ltd. purchased machinery of ₹ 10,00,000 from Grand Iron Works Ltd. and paid as follows:
(a) Issued 50,000 Equity Shares of ₹ 10 each at a premium of ₹ 2.
(b) Gave an acceptance of ₹ 3,00,000 payable after 3 months; and
(c) Balance by issuing post-dated cheque of two months of ₹ 1,00,000.
Pass the Journal entries in the books of Alankrit Ltd. and Grand Iron Works Ltd.

Answer 1

In the books of Alankrit Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
i)	Machinery A/c	Dr.		10,00,000
	To Grand Iron Works Ltd.				10,00,000
	(Being machinery purchased on from Grand Iron Works Ltd.)
ii)	Grand Iron Works Ltd.	Dr.		10,00,000
	To Share Capital A/c (50,000 × 10)				5,00,000
	To Securities Premium Reserve A/c (50,000 × 2)				1,00,000
	To Bills Payable A/c				3,00,000
	To Bank A/c				1,00,000
	(Being shares issued, bill accepted and post-dated cheque issued)

In the books of Grand Iron Works Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
i)	Alankrit Ltd.	Dr.		10,00,000
	To Sales A/c				10,00,000
	(Being machinery sold to Alankrit Ltd.)
ii)	Investment A/c	Dr.		6,00,000
	Bills Receivable A/c	Dr.		3,00,000
	Cheques-in-Hand A/c	Dr.		1,00,000
	To Alankrit Ltd.				10,00,000
	(Being shares, acceptance and post-dated cheque received as against machinery)