The exercise was overseen by Kim Jong-un, said the KCNA state news agency, who called on the military to be ready to “ruthlessly” destroy the government in South Korea.
It is the latest in a series of angry gestures by Pyongyang.
South Korean President Park Geun-hye has ordered the army to be on alert.
However, Park Geun-hye said on March 24 that “reckless provocations will only become a path to self-destruction for the North Korean regime”.
North Korea has been reacting after the UN imposed some of its toughest sanctions following its nuclear and long-range rocket tests.
Pyongyang has also been angered, as it is annually, by joint US-South Korean military exercises taking place south of the border.
Already known for vitriolic language, the KCNA report threatened to turn South Korea’s presidential residence into a “sea of flames and ashes”.
“Artillery shells flew like lightning and intensely and fiercely struck targets simulating Cheong Wa Dae and rebel governing bodies in Seoul,” it said of the latest drill, using the Korean name for the Blue House.
It was not clear when the drill was carried out, but the report warned of a “miserable end” for President Park Geun-hye.
The Blue House (Cheongwadae) was attacked by North Korean commandos in 1968.
The attempt to assassinate then-President Park Chung-hee was unsuccessful, but seven South Koreans and most of the 31 North Koreans attackers were killed.
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