question_answer

X Ltd purchased machinery from Y Ltd and paid to Y Ltd as follows :

(i) By issuing 5,000, equity shares of Rs. 10 each at a premium of 10%.

(ii) By issuing 100, 9% debentures of Rs. 100 each at a discount of 10%.

(iii) Balance by accepting a bill of exchange of Rs. 25,000 payable after one month.

Pass necessary journal entries in the books of X Ltd for the purchase of machinery and making payment to Y Ltd.

Answer:

Purchase consideration = Rs. 89,000