Bansal Heavy machine Ltd purchased machine worth Rs 3,20,000 from Handa Trader. Payment was made as Rs 50,000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 90 each.

Give journal entries to record the above transaction.

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Solution

Book of Bansal Heavy Machine Ltd

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Machinery A/c

Dr.

3,20,000

To Cash A/c

50,000

To Handa Traders

2,70,000

(Machine purchased from Handa Traders paid Rs 50,000 in

cash immediately)

Handa Trader

Dr.

2,79,000

Discount on Issue of Shares A/c

Dr.

30,000

To Share Capital A/c

3,00,000

(3,000 share issued at Rs 90 face value of Rs 100 each to

Handa Traders in consideration of amount due to him for

machinery purchased)

Working Notes:-

1. Number of share issued

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Book of Bansal Heavy Machine Ltd
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
	Machinery A/c		Dr.		3,20,000
		To Cash A/c				50,000
		To Handa Traders				2,70,000
	(Machine purchased from Handa Traders paid Rs 50,000 in cash immediately)

	Handa Trader		Dr.		2,79,000
	Discount on Issue of Shares A/c		Dr.		30,000
		To Share Capital A/c				3,00,000
	(3,000 share issued at Rs 90 face value of Rs 100 each to Handa Traders in consideration of amount due to him for machinery purchased)

Bansal Heavy machine Ltd purchased machine worth Rs 3,20,000 from Handa Trader. Payment was made as Rs 50,000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 90 each. Give journal entries to record the above transaction.

Bansal Heavy machine Ltd purchased machine worth Rs 3,20,000 from Handa Trader. Payment was made as Rs 50,000 cash and remaining amount by issue of equity share of the face value of Rs 100 each fully paid at an issue price of Rs 90 each.

Give journal entries to record the above transaction.