Question 16 of 16
Q.Z Ltd. purchased a machine of Rs. 3,99,000 and issued debentures to the vendor (S Ltd.) as purchase consideration. Pass necessary journal entries in the following two cases :
Case
(i) If 8% Debentures of Rs. 50 each are issued to the vendor at 5% discount.
Case
Case
(ii) If 10% Debentures of Rs. 100 each are issued to the vendor at 5% premium. (2 + 2)
West Bengal WbchseWBCHSE West Bengal HS (Class-12) Commerce Board 2025Subjective· 4mImportance★★★★★est
100% · 16/16 Questions
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Start your 14-day free trial to unlock the full solution →Machine Rs. 3,99,000 is the purchase consideration. Case (i): issue 8,400 8% Debentures of Rs. 50 at 5% discount; Discount on Issue = Rs. 21,000. Case (ii): issue 3,800 10% Debentures of Rs. 100 at 5% premium; Securities Premium = Rs. 19,000.
Working notes:
- Case (i): Issue price per debenture = 50 - 5% of 50 = 50 - 2.50 = Rs. 47.50. Number = 3,99,000 / 47.50 = 8,400 debentures. Face value = 8,400 x 50 = Rs. 4,20,000; Discount = 8,400 x 2.50 = Rs. 21,000.
- Case (ii): Issue price per debenture = 100 + 5% of 100 = Rs. 105. Number = 3,99,000 / 105 = 3,800 debentures. Face value = 3,800 x 100 = Rs. 3,80,000; Premium = 3,800 x 5 = Rs. 19,000.
Journal Entries in the books of Z Ltd.
| Particulars | Dr. (Rs.) | Cr. (Rs.) |
|---|---|---|
| Machinery A/c Dr. | 3,99,000 | |
| To S Ltd. (Vendor) | 3,99,000 | |
| (Machine purchased from S Ltd.) | ||
| Case (i): | ||
| S Ltd. Dr. | 3,99,000 | |
| Discount on Issue of Debentures A/c Dr. | 21,000 | |
| To 8% Debentures A/c | 4,20,000 |
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