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Reassessment of Liabilities

Goodluck Ltd ...

Question

Goodluck Ltd purchased machinery costing ₹ 10,00,000 from Fair Deals Ltd. The company paid the price by issue of Equity Shares of ₹ 10 each at a premium of 25%.
Pass necessary Journal entries for the above transactions in the books of Goodluck Ltd.

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Solution

Books Goodluck Ltd.

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Machinery A/c

Dr.

10,00,000

To Fail Deals Ltd.

10,00,000

(Machinery purchased from Fair Deals Ltd.)

Fair Deals Ltd.

Dr.

10,00,000

To Equity Share Capital A/c

8,00,000

To Securities Premium A/c

2,00,000

(80,000 equity shares of Rs 10 each issued at 25% premium)

Working Note:

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