Kumar Ltd. Purchased Assets of Rs. 6,30,000 From Bhanu Oil Ltd Kumar Ltd. Issued Equity Share of Rs. 100 Each Fully Paid in Consideration

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9.Kumar Ltd. purchased assets of Rs. 6,30,000 from Bhanu Oil Ltd. Kumar Ltd. issued equity share of Rs. 100 each fully paid in consideration. What journal entries will be made, if the shares are issued, (a) at par, and (b) at premium of 20%.




Books of Kumar Ltd.

Journal

DateParticularsL.F
Amount
(Dr.)
Amount
(Cr.)
Sundry Asset A/c6,30,000
  To Bhanu Oil Ltd. A/c6,30,000
( Being Asset purchase from Bhanu Oil Ltd.)
Bhanu Oil Ltd. A/c6,30,000
  To Share capital A/c6,30,000
( Issued share to Bhanu Oil Ltd. of 6,300 shares )

Working note

number of shares to be issued 

Number of shares to be issued to Bhanu Oil Ltd. = Amount payable/ face value

=6,30,000/100

= Rs. 6,300

(II)

DateParticularsL.F.Amount (Dr.)Amount (Cr.)
Sundry Asset A/cDr.6,30,000
  To Bhanu Oil Ltd. A/c6,30,000
( Being Asset purchase from Bhanu Oil Ltd.)
Bhanu Oil Ltd. A/cDr.6,30,000
  To share Capital A/c5,25,000
  To Securities Premium A/c1,05,000
(5,250 share are issued at 20% premium to Bhanu Ltd. in consideration of assets purchased)

Chapter-1 Accounting for Share Capital-II


Location: India

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