Question

Jain Ltd purchased machinery costing ₹ 10,00,000 from Ayer Ltd. 50% of the payment was made by cheque and for the remaining 50% , the company issued Equity Shares of ₹ 100 each at a premium of 25% . Pass necessary Journal entries in the books of Jain Ltd . for the above transaction.

Answer 1

Books of Jain Ltd. Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Machinery A/c	Dr.		10,00,000
	To Ayer Ltd.				10,00,000
	(Machinery purchased from Ayer Ltd.)
	Ayer Ltd.	Dr.		5,00,000
	To Bank A/c				5,00,000
	(Payment made to Ayer Ltd.)
	Ayer Ltd.	Dr.		5,00,000
	To Equity Share Capital A/c				4,00,000
	To Securities Premium A/c				1,00,000
	(4,000 equity shares of Rs 100 each issued at 25% premium)

Working Note-