Pass Journal entries for the following transactions:
Green Ltd. Purchased plant and machinery for ₹ 2,00,000 payable by three months post-dated cheque and balance by issue of 6% Debentures of ₹ 100 each at a discount of 10% . The company has balance of ₹ 10,000 in Securities Premium Reserve. It decided to write off Discount from securities from Securities Premium Reserve up to the balance in the account.
1. Number of Debentures issued `=(Purchase Price - Cash Payment)/(Issue Price of Debenture)`.
`=(₹ 20,00,000 - ₹ 65,000)/(₹ 100 - ₹ 10) = (₹ 1,35,000)/(₹ 90) = 1,500 Debentures.
Post-dated cheque will be recorded in the books of drawer when it is issued.