Question 22 Chapter 9 of +2-A - T.S. Grewal 12 Class

Question 22 Chapter 9 of +2-A

22. Exe Ltd. purchased the assets of the book value  ₹4,00,000 and took over the liabilities of ₹ 50,000 from Mohan Bros.It was agreed that the  purchase consideration ,settled at  ₹3,80,000 be paid by issuing debentures  of ₹ 100 each.
Pass journal entries if debenture are issued:
(a) at par
(b) at a discount of 10% and
(c) at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash..

The solution of Question 22 Chapter 9 of +2-A: - 

Date	Particulars		L.F.	Debit	Credit
	Assets A/c	Dr		4,00,000
	Goodwill A/c	Dr		30,000
	To Liabilities A/c				50,000
	To Mohan Bros A/c				3,80,000
	(Being assets and liabilities purchased from Mohan Bros. )
	When Debenture issued at par
	Mohan Bros A/c	Dr		3,80,000
	To Debenture A/c				3,80,000
	(Being Debenture issued at securities premium)

Working Note

 

No of Debenture to be issued	=	Purchase consideration	=	3,80,000	=	3,800 debentures
		Issue price		100

 

 

Date	Particulars		L.F.	Debit	Credit
	Assets A/c	Dr		4,00,000
	Goodwill A/c	Dr		30,000
	To Liabilities A/c				50,000
	To Mohan Bros A/c				3,80,000
	(Being assets and liabilities purchased from Mohan Bros. )
	When Debenture issued at 10% Discount
	Mohan Bros A/c	Dr		3,80,000
	Discount on Issue of Debenture A/c	Dr		42,220
	To Debenture A/c				4,22,200
	To Bank A/c				20
	(Being Debenture issued at securities premium)

 

 

No of Debenture to be issued	=	Purchase consideration	=	3,80,000	=	4,222 debentures
		Issue price		90

 

 

Date	Particulars		L.F.	Debit	Credit
	Assets A/c	Dr		4,00,000
	Goodwill A/c	Dr		30,000
	To Liabilities A/c				50,000
	To Mohan Bros A/c				3,80,000
	(Being assets and liabilities purchased from Mohan Bros. )
	When Debenture issued at 10% premium
	Mohan Bros A/c	Dr		3,80,000
	To Debenture A/c				3,45,400
	To Securities Premium A/c				34,540
	To Bank A/c				60
	(Being Debenture issued at securities premium)

 

 

No of Debenture to be issued	=	Purchase consideration	=	3,80,000	=	3,454.6 Debentures
		Issue price		110

 

 

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Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication