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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Neeraj Ltd. took over the business of Ajay Enterprises on 1-04-2020. The details of the agreement regarding the assets and liabilities to be taken over are:
| Particulars | Book Value (₹) | Agreed Value (₹) |
|---|---|---|
| Building | 20,00,000 | 35,00,000 |
| Plant and Machinery | 12,00,000 | 8,00,000 |
| Stock | 4,00,000 | 4,00,000 |
| Trade Receivables | 5,00,000 | 4,00,000 |
| Creditors | 2,00,000 | 3,00,000 |
| Outstanding Expenses | 50,000 | 1,00,000 |
It was decided to pay ₹7,00,000 of the purchase consideration through cheque, and the balance by issue of 9% Debentures of ₹20 each at a premium of 25%. Journalise. (CBSE Sample Paper 2020)
JOURNAL (Books of Neeraj Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Building A/c Dr. | 35,00,000 | |||
| Plant and Machinery A/c Dr. | 8,00,000 | |||
| Stock A/c Dr. | 4,00,000 | |||
| Trade Receivables A/c Dr. | 4,00,000 | |||
| To Creditors A/c | 3,00,000 | |||
| To Outstanding Expenses A/c | 1,00,000 | |||
| To Ajay Enterprises’s A/c | 47,00,000 | |||
| (Business of Ajay Enterprises taken over at agreed values) | ||||
| Ajay Enterprises’s A/c Dr. | 47,00,000 | |||
| To Bank A/c | 7,00,000 | |||
| To 9% Debentures A/c | 32,00,000 | |||
| To Securities Premium Reserve A/c | 8,00,000 | |||
| (1,60,000; 9% Debentures of ₹20 each issued at a premium of 25% (₹25 per debenture), in discharge of the balance of the purchase consideration) |
Working Note: Net assets acquired = 35,00,000 + 8,00,000 + 4,00,000 + 4,00,000 − 3,00,000 − 1,00,000 = ₹47,00,000 (no goodwill or capital reserve arises, since this equals the total purchase consideration). Balance payable by debentures = 47,00,000 − 7,00,000 = ₹40,00,000. Number of debentures = 40,00,000 ÷ 25 = 1,60,000.
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.26 - Issue of Debentures", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Issue of Debentures.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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