Question

Radha Ltd. purchased machinery worth Rs 4,00,000 from Krishna Ltd on 1st April 2017. Rs 1,00,000 were paid immediately and the balance was paid by issue of Rs 2,80,000 $12\%$ debentures in Radha Ltd. Pass the necessary journal entries for recording the transactions in the books of Radha Ltd.

Answer 1

Journal of Radha Ltd

$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F}& \text{Dr (Rs)}& \text{Cr. (Rs)}\\ 2017& & & & & \\ \text{April}& \text{Machinery A/c}& \text{Dr}& & 4,00,000& \\ & \text{To Krishna Ltd}& & & & 4,00,000\\ & \text{(Machinery purchased from Krishna Ltd.)}& & & & \\ \text{April 1}& \text{Krishna Ltd}& \text{Dr}& & 1,00,000& \\ & \text{To Bank A/c}& & & & 1,00,000\\ & \text{(Part payment made in cash)}& & & & \\ \text{April 1}& \text{Krishna Ltd}& \text{Dr}& & 3,00,000& \\ & \text{To}12\%\text{Debentures A/c}& & & & 2,80,000\\ & \text{To Securities Premium Reserve A/c}& & & & 20,000\\ & \text{(Balance amount of Rs 3,00,000 settled by the issue of}& & & & \\ & \text{Rs 2,80,000 debentures)}& & & & \end{array}$