journal entries

1)plant and machinery A/c  Dr   8,00,000

                 To mogan & co ltd  A/c     7,20,000

                  To cash A/c     A/c                   80,000

(being purchased plant and machinery and PAID in CONSIDERATION of EQUITY shares )

when shares issued at par

2 Mogan & co ltd A/c Dr     720000

              To equity share capital A/c            7,20,000

(being 72000 equity shares of 10 rs each issued at par )

when shares issues at premium

2) Mogan & co ltd A/c Dr 720000

              To securities premium A/c 120000

               To Equity share capital A/c 600000

(being 60000 equity shares of 10 rs each issued at premium at 20% )

working note :

calculation for shares issued at premium

no of shares issued = amount payable / issue price

=720000/12

=60000

securities premium = 600000*12

=120,000

equity share = 60000*10

=6,00,000

when shares issued at discount

2) Mogan & co ltd A/c Dr    720000

    discount on issue of share A/c  Dr  180000

               To Equity share capital A/c     540000

(being 90000 equity shares of 10 rs each issued at discount at 20% )

working note :

calculation for shares issued at discount

no of shares issued = amount payable / issue price

=720000/8

=90000

securities premium = 90000*2

=180,000

equity share = 90000*6

=5,40,000

Hope its useful ..!!