A Coal Company takes a lease of mine from 1st January, 2001 paying a minimum 

rent of Rs. 10,000 per annum merging in a royalty of Re. 0.50 paise per ton of coal

 

raised. The lease contains a provision to the effect that if the minimum rent paid in

 

any year exceeds the royalty for the year, the amount for the excess may be recouped

 

by the coal company out of the royalty payable in the following year only. The coal

 

is raised as follows:

 

 

Give journal entries necessary to record these transactions in the books of Coal

 

Company.

 

 

 

 

 

Answer rating: 100% (QA)

ANSWER To record the transactions in the books of the Coal Company we need to consider the lease pay... View the full answer