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Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal?
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Amrit ltd. Company purchase machine worth rs 115000 from indian trader...
Journal Entry for the Purchase of Machine by Amrit Ltd.
1. Purchase of Machine:
When Amrit Ltd. purchases a machine worth Rs. 115,000 from Indian Traders, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
-----------------------------------------------------------------
[Date] Machine (Asset) 115,000
Accounts Payable 115,000
2. Payment by Gross Check:
When Amrit Ltd. makes a payment of Rs. 10,000 by gross check, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
-----------------------------------------------------------------
[Date] Accounts Payable 10,000
Bank 10,000
3. Issuance of Equity Shares:
When the remaining amount is paid through the issuance of equity shares with a face value of Rs. 10 each, fully paid at an issued price of Rs. 10.50, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
------------------------------------------------------------------
[Date] Machine (Asset) 105,000
Share Capital (Equity) 100,000
Share Premium (Equity) 5,000
Explanation:
The journal entry is divided into three parts:
1. Purchase of Machine:
- The machine is recorded as an asset on the debit side of the journal entry, increasing the asset value.
- The accounts payable account is credited, representing the liability to Indian Traders for the machine purchase.
2. Payment by Gross Check:
- The accounts payable account is debited, reducing the liability owed to Indian Traders for the machine purchase.
- The bank account is credited, representing the payment made by a gross check.
3. Issuance of Equity Shares:
- The machine's cost of Rs. 105,000 is debited, reducing the asset value.
- The share capital account is credited with the face value of the equity shares issued, which is Rs. 10,000 (Rs. 10 x 1,000 shares).
- The share premium account is credited with the excess amount received on the issuance, which is Rs. 5,000 (Rs. 0.50 x 10,000 shares).
Summary:
In summary, the journal entry for the purchase of a machine by Amrit Ltd. involves recording the machine as an asset, accounts payable for the liability, payment made by a gross check, and the issuance of equity shares to cover the remaining amount. This ensures accurate representation of the company's financial transactions and maintains the balance between assets, liabilities, and equity.
1. Purchase of Machine:
When Amrit Ltd. purchases a machine worth Rs. 115,000 from Indian Traders, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
-----------------------------------------------------------------
[Date] Machine (Asset) 115,000
Accounts Payable 115,000
2. Payment by Gross Check:
When Amrit Ltd. makes a payment of Rs. 10,000 by gross check, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
-----------------------------------------------------------------
[Date] Accounts Payable 10,000
Bank 10,000
3. Issuance of Equity Shares:
When the remaining amount is paid through the issuance of equity shares with a face value of Rs. 10 each, fully paid at an issued price of Rs. 10.50, the following journal entry is recorded:
Date Account Titles and Explanation Debit ($) Credit ($)
------------------------------------------------------------------
[Date] Machine (Asset) 105,000
Share Capital (Equity) 100,000
Share Premium (Equity) 5,000
Explanation:
The journal entry is divided into three parts:
1. Purchase of Machine:
- The machine is recorded as an asset on the debit side of the journal entry, increasing the asset value.
- The accounts payable account is credited, representing the liability to Indian Traders for the machine purchase.
2. Payment by Gross Check:
- The accounts payable account is debited, reducing the liability owed to Indian Traders for the machine purchase.
- The bank account is credited, representing the payment made by a gross check.
3. Issuance of Equity Shares:
- The machine's cost of Rs. 105,000 is debited, reducing the asset value.
- The share capital account is credited with the face value of the equity shares issued, which is Rs. 10,000 (Rs. 10 x 1,000 shares).
- The share premium account is credited with the excess amount received on the issuance, which is Rs. 5,000 (Rs. 0.50 x 10,000 shares).
Summary:
In summary, the journal entry for the purchase of a machine by Amrit Ltd. involves recording the machine as an asset, accounts payable for the liability, payment made by a gross check, and the issuance of equity shares to cover the remaining amount. This ensures accurate representation of the company's financial transactions and maintains the balance between assets, liabilities, and equity.
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Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal?
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Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal?.
Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Amrit ltd. Company purchase machine worth rs 115000 from indian traders payment was made as to rs 10,000 by gross check and remaining amount issued of equity share of the face value of rs 10each fully paid issued price 10.50 make entry in company journal?.
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