Question

Z Ltd . purchased furniture costing ₹ 2,20,000 from C.D Ltd. The payment was to be made by issue of 9% Preference Shares of ₹ 100 each ata premium of ₹ 10 per share . Pass necessary Journal entries in the books of Z Ltd.

Answer 1

Books of Z Ltd. Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Assets A/c	Dr.		2,20,000
	To C.D Ltd.				2,20,000
	(Assets purchased from C.D Ltd.)
	C.D Ltd.	Dr.		2,20,000
	To 9% Preference Share Capital				2,00,000
	To Securities Premium A/c				20,000
	(2,000 9% Preference Shares of Rs 100 each issued at 10% premium to C.D Ltd.)

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