T.S. Grewal Class 12 Vol 2 Chapter 2 Q.19 - Issue of Debentures

Question 19

Ananya Ltd. purchased an established business for ₹2,00,000, payable as ₹65,000 by cheque and the balance by issuing 9% Debentures of ₹100 each at a discount of 10%. Give the Journal entries in the books of Ananya Ltd.

Solution

JOURNAL (Books of Ananya Ltd.)

Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
	Sundry Assets A/c    Dr.		2,00,000
	To Vendor A/c			2,00,000
	(Business purchased)
	Vendor A/c    Dr.		65,000
	To Bank A/c			65,000
	(Amount paid to vendor by cheque)
	Vendor A/c    Dr.		1,35,000
	Discount on Issue of Debentures A/c    Dr.		15,000
	To 9% Debentures A/c			1,50,000
	(1,500 debentures issued at a 10% discount, in settlement of the balance of the purchase consideration)

Working Note: Number of debentures to be issued = Purchase consideration ÷ Issue price = 1,35,000 ÷ 90 = 1,500 debentures.