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. Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium?
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. Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued ...
Entries for Issuance of Equity Shares in Satisfaction of Assets
At Par
- When equity shares are issued at par, the entry will be as follows:
- Equity Share Capital A/c Dr 1,80,000
- To Shankar Ltd. A/c 1,80,000
- Explanation: In this case, the equity share capital account is debited with the value of assets acquired, i.e., ₹1,80,000, and the corresponding credit is made to Shankar Ltd. to settle their claim.
At 20% Premium
- When equity shares are issued at a premium of 20%, the entry will be as follows:
- Equity Share Capital A/c Dr 1,50,000
- Securities Premium Reserve A/c Dr 30,000
- To Shankar Ltd. A/c 1,80,000
- Explanation: In this case, the equity share capital account is debited with the face value of shares issued, i.e., ₹1,50,000, and the premium amount of ₹30,000 is credited to the securities premium reserve account. The total credit amount of ₹1,80,000 is made to Shankar Ltd. to settle their claim.
By following these entries, Ravi Ltd. can effectively record the acquisition of assets from Shankar Ltd. through the issuance of equity shares either at par or at a premium. Each entry reflects the specific transaction details and ensures accurate accounting treatment for the transaction.
At Par
- When equity shares are issued at par, the entry will be as follows:
- Equity Share Capital A/c Dr 1,80,000
- To Shankar Ltd. A/c 1,80,000
- Explanation: In this case, the equity share capital account is debited with the value of assets acquired, i.e., ₹1,80,000, and the corresponding credit is made to Shankar Ltd. to settle their claim.
At 20% Premium
- When equity shares are issued at a premium of 20%, the entry will be as follows:
- Equity Share Capital A/c Dr 1,50,000
- Securities Premium Reserve A/c Dr 30,000
- To Shankar Ltd. A/c 1,80,000
- Explanation: In this case, the equity share capital account is debited with the face value of shares issued, i.e., ₹1,50,000, and the premium amount of ₹30,000 is credited to the securities premium reserve account. The total credit amount of ₹1,80,000 is made to Shankar Ltd. to settle their claim.
By following these entries, Ravi Ltd. can effectively record the acquisition of assets from Shankar Ltd. through the issuance of equity shares either at par or at a premium. Each entry reflects the specific transaction details and ensures accurate accounting treatment for the transaction.
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. Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium?
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. Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about . Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for . Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium?.
. Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium? for UPSC 2025 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about . Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium? covers all topics & solutions for UPSC 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for . Ravi Ltd. purchased assets of ₹1,80,000 from Shankar Ltd. It issued equity shares of 10 each fully paid in satisfaction of their claim. What entries will be made in case schen issue is (a) at par; (b) at 20% premium?.
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