F ltd purchased machinery from G company for a book value of 4,00,000.The consideration was paid by issue of 10%
debenture of Rs 100 each at a discount of 20% . the dbnture acc cr vth?
a)400000
b)500000
c)320000
d)480000
pls xplain vth ans......
4 Replies
CA. Mayur
(Service)
(147 Points)
Replied 31 August 2012
issue of debenture on discount means you will receive 20% less than the face value of debentures in the given case as the debentures are issued as consideration for machinery so I presumed 80,000 is paid in cash. So accounting entries will be : Machinery account Dr 400,000 Discount on issue of Deb Dr 80,000 Debentures account Cr 400,000 Cash account Cr 80,000.
CA C.JANANI
(partner)
(270 Points)
Replied 31 August 2012
The entry is
Fixed Asset A/c Dr 400000
Discount on debentures A/c dr 100000
To debentures A/c 500000
harish ragav
(student-IPCC)
(407 Points)
Replied 31 August 2012
how you calculate discount./ pls xplain...
Abhinav
(student)
(564 Points)
Replied 04 September 2012
4,00,000 is payable. Issue price is Rs. 80 (assuming face value 100)
No. of deb. To be issued =400000/80=5000
disc dr. 5000*20=100000
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