A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal?

Explore Courses UPSC Exam UPSC Test Series Free Notes EduRev Infinity

Open App

B Com Exam > B Com Questions > A limited company purchased a machine worth R...

Join the Discussion on the App

A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal?

Join for Free

Join for Free

Most Upvoted Answer

A limited company purchased a machine worth Rs. 1,15,000 from Indian t...

Journal entries for purchase of machine by a limited company

When a limited company purchases a machine, various transactions take place which needs to be recorded in the company's journal. The following are the journal entries that the company should make for the given transaction:

1. Purchase of machine
When the company purchases a machine, it needs to record the purchase transaction in the journal. The entry for the same is as follows:

Machine A/c Dr. 1,15,000
To Indian Traders A/c 1,15,000

2. Payment by crossed cheque
The company paid Rs. 10,000 through a crossed cheque. The entry for the same is as follows:

Indian Traders A/c Dr. 10,000
To Bank A/c 10,000

3. Issue of equity shares
The remaining amount was paid through the issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. The entry for the same is as follows:

Bank A/c Dr. 1,05,000
To Equity Share Capital A/c 1,00,000
To Securities Premium A/c 5,000

Explanation: The company issued equity shares of the face value of Rs. 10 each at an issue price of Rs. 10.50 each. The difference between the face value and the issue price is called Securities Premium. Hence, the company issues shares at a premium of Rs. 0.50 per share. The total number of equity shares issued is 10,000 (Rs. 1,05,000/Rs. 10.50).

In conclusion, the purchase of a machine by a limited company involves various transactions such as purchase of the machine, payment through crossed cheque and issue of equity shares. The company should record all these transactions in its journal.

Community Answer

A limited company purchased a machine worth Rs. 1,15,000 from Indian t...

15000

Share via Whatsapp

View all answers Start learning for free

Explore Courses for B Com exam

Similar B Com Doubts

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?

View answer

On 1-1-92 a limited company purchased machinery and on 30-6-93 it acquired additional machinery at a cost of Rs. 2,000. On 31-3-94, one of the original machines which had cost Rs. 500 was found to have become obsolete and was sold as scrap for Rs. 50. It was replaced on that date by a new machine costing Rs. 800. Depreciation is to be provided at the rate of 15% p.a. on the written down value: Show ledger accounts for the first two years.?

View answer

The capital of A, B, and C partnership firm at the date of purchase by the limited company were Rs.10,000, Rs.6,000, and Rs.5,000. The partnership firm was converted into a limited company and assets and liabilities were sold to the company agreed to pay Rs. 8,000 more than the book value and machinery which was taken at Rs. 1,000 less than the book value. Calculate purchase consideration under net asset method.?

View answer

On July1,2009 granites Ltd purchased second hand machine for 40,000 and reconditioned the same by spending 6,000 on January 2021 a new Machine was purchased for 24,000.on June 30,2011 the machine purchased on January 1,2010 was sold for 16,000 and another machine was installed at a cost of 30,000 the company writen off 10% on original cost every year on march 31.show the machinery account up to 31st march?

View answer

X Ltd purchased on first of October 2014 a machinery for 32,000 and spent 5000 on freight and transit insurance on 25 December 2014 and for this 20,000 on its direction the machinery was put to use on 1 January 2015 on July 1, 2016 it purchased another machine for 10,000 and on 10 July 2017 soul of the first machine purchased in 2015 for 28,000 on the same time date it purchased a machinery for 25,000 on first of July 2018 the second machinery purchased for 10,000 was sold of four 2000 depreciation was provided on the machinery at the rate of 10% on the original cost annually 31st of December in 2018 hours the company change the method of providing appreciation adopted the written down value method?

View answer

Share with a Friend

Answer this doubt

Question Description
A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's 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 A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal?.

Solutions for A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? in English & in Hindi are available as part of our courses for B Com. Download more important topics, notes, lectures and mock test series for B Com Exam by signing up for free.

Here you can find the meaning of A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? defined & explained in the simplest way possible. Besides giving the explanation of A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal?, a detailed solution for A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? has been provided alongside types of A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? theory, EduRev gives you an ample number of questions to practice A limited company purchased a machine worth Rs. 1,15,000 from Indian traders. Payment was made as to Rs. 10,000 by a crossed cheque and remaining amount by issue of equity shares of the face value of Rs. 10 each fully paid at an issue price of Rs. 10.50 each. Make entries in company's journal? tests, examples and also practice B Com tests.

Explore Courses for B Com exam