why does this purchase consideration entry seem different and why hasn't JSS Ltd been credited as the vendor?
 Illustration 15. Lemon Tree Ltd. Purchased a piece of land from JSS Ltd. and paid the consideration as follows:

(i) Issued a cheque for Rs. 10,00,000:
(ii) Issued a Bill of Exchange for 3 Months for Rs. 5,00,000;
(iii) Issued 5,000; 9% Debentures of Rs. 100 each at per redeemable at 10 % premium after 5 years. Pass the Journal entry. 

Solution. 
  I the Books of lemon tree Ltd.

JOURNAL

 
   
Date Particulars L.F. Dr. (Rs.) Cr. (Rs)
  Land A/c
Loss on issue of Debentures A/c
To Bank A/c
To Bank A/c
To 9% Debentures A/c
To Premium of Redemption of Debentures A/c
(Being the land purchased and consideration paid)
 
20,00,000
50,000



 
10,00,000
5,00,000
5,00,000
50,000


 

Dear Student,

The entry that you posted is a compound entry and JSS Ltd. in entry 1 is cancelled with JSS Ltd. in entry 2. The two entries are separately shown below.

 
Journal
Date Particulars L.F. Debit
Amount
(Rs)
Credit
Amount
(Rs)
  Land A/c Dr.   20,00,000  
    To JSS Ltd.       20,00,000
  (Land purchased from JSS Ltd.)        
           
  JSS Ltd. Dr.   20,00,000  
  Loss on Issue of Debentures A/c Dr.   50,000  
    To Bank A/c        10,00,000
    To Bills Payable A/c       5,00,000
    To 9% Debentures A/c       5,00,000
    To Premium on Redemption of Debentures A/c       50,000
  (JSS Ltd. Issued cheque, bill and 9% Debentures of Rs 100 each at a premium of 10%)        
           

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Because we have pass only one entry in it that's why we have combined the 2 entries and JSS ltd. Of 1st entry is cancelled with JSS ltd. In 2 nd entry so this became the compound entry
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