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Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum of ₹75,000 was paid by the means of a bank draft and for the balance due Rohit Ltd. issued equity shares of 10 each at a premium of 10%. Journalise the above transactions in the books of Rohit Ltd.?
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Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum o...



Journal Entry for Purchase of Machinery from Rohan & Co.

1. Payment by Bank Draft:
  • Debit Machinery Account - ₹3,50,000
  • Credit Bank Account - ₹75,000
  • Credit Rohan & Co. Account - ₹2,75,000



2. Issuance of Equity Shares:
  • Debit Rohan & Co. Account - ₹2,75,000
  • Credit Equity Share Capital Account - ₹1,75,000 (₹17,500 shares at ₹10 each)
  • Credit Securities Premium Reserve Account - ₹1,00,000 (10% premium on equity shares issued)




Explanation:
1. Payment by Bank Draft:
- The Machinery account is debited to record the purchase of machinery for ₹3,50,000.
- The Bank account is credited with ₹75,000, which represents the payment made through a bank draft.
- The remaining balance of ₹2,75,000 is credited to Rohan & Co. account, which represents the amount due for the machinery purchase.
2. Issuance of Equity Shares:
- The Rohan & Co. account is debited with ₹2,75,000 to clear the balance due for the machinery purchase.
- Equity Share Capital account is credited with ₹1,75,000 (₹17,500 shares at ₹10 each) to account for the issuance of equity shares.
- Securities Premium Reserve account is credited with ₹1,00,000, which represents the premium received on the issuance of equity shares at 10% premium.
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Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum of ₹75,000 was paid by the means of a bank draft and for the balance due Rohit Ltd. issued equity shares of 10 each at a premium of 10%. Journalise the above transactions in the books of Rohit Ltd.?
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Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum of ₹75,000 was paid by the means of a bank draft and for the balance due Rohit Ltd. issued equity shares of 10 each at a premium of 10%. Journalise the above transactions in the books of Rohit Ltd.? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum of ₹75,000 was paid by the means of a bank draft and for the balance due Rohit Ltd. issued equity shares of 10 each at a premium of 10%. Journalise the above transactions in the books of Rohit Ltd.? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Rohit Ltd. purchased Machinery from Rohan & Co. for ₹3,50,000. A sum of ₹75,000 was paid by the means of a bank draft and for the balance due Rohit Ltd. issued equity shares of 10 each at a premium of 10%. Journalise the above transactions in the books of Rohit Ltd.?.
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