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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Gundola Ltd. took over assets of ₹9,00,000 and liabilities of ₹3,00,000 from AK Ltd. for an agreed purchase consideration of ₹14,00,000. The payment was made through a bank draft of ₹5,00,000, and the remainder by issue of 8% Debentures of ₹100 each at a discount of 10%. Record the necessary Journal entries in the books of Gundola Ltd. for the above transactions. (CBSE 2024)
JOURNAL (Books of Gundola Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Goodwill A/c Dr. | 8,00,000 | |||
| Assets A/c Dr. | 9,00,000 | |||
| To Liabilities A/c | 3,00,000 | |||
| To AK Ltd. A/c | 14,00,000 | |||
| (Assets and liabilities taken over from AK Ltd.; Goodwill recognised as the excess of purchase consideration over net assets acquired) | ||||
| AK Ltd. A/c Dr. | 14,00,000 | |||
| Discount on Issue of Debentures A/c Dr. | 1,00,000 | |||
| To Bank A/c | 5,00,000 | |||
| To 8% Debentures A/c | 10,00,000 | |||
| (Purchase consideration discharged partly by bank draft and partly by issuing 10,000; 8% Debentures of ₹100 each at a 10% discount) |
Working Note: Net assets acquired = 9,00,000 − 3,00,000 = ₹6,00,000. Goodwill = Purchase consideration (14,00,000) − Net assets (6,00,000) = ₹8,00,000. Debentures issued (face value ₹100 assumed, as is standard when not stated) = balance of consideration (14,00,000 − 5,00,000 = 9,00,000) ÷ issue price (₹90) = 10,000 debentures.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 2 Q.21 - Issue of Debentures", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Issue of Debentures.
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