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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Dev Ltd. acquired the running business of Amrit Ltd., having assets of ₹10,00,000 and liabilities of ₹2,50,000. 9% Debentures of ₹100 each were issued for the acquisition of the business at a premium of ₹20 per debenture. The company also issued 10,000, 8% Debentures of ₹100 each, redeemable at a premium of ₹20 per debenture after 5 years. You are required to pass the Journal entries for the above transactions.
JOURNAL (Books of Dev Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Assets A/c Dr. | 10,00,000 | |||
| To Amrit Ltd.’s A/c | 7,50,000 | |||
| To Liabilities A/c | 2,50,000 | |||
| (Running business acquired) | ||||
| Amrit Ltd.’s A/c Dr. | 7,50,000 | |||
| To 9% Debentures A/c (6,250 × ₹100) | 6,25,000 | |||
| To Securities Premium A/c (6,250 × ₹20) | 1,25,000 | |||
| (6,250; 9% Debentures of ₹100 each issued at a premium of ₹20 per debenture to Amrit Ltd., for taking over assets costing ₹10,00,000 and liabilities of ₹2,50,000) | ||||
| Bank A/c Dr. | 10,00,000 | |||
| To Debenture Application and Allotment A/c | 10,00,000 | |||
| (Application money received) | ||||
| Debenture Application and Allotment A/c Dr. | 10,00,000 | |||
| Loss on Issue of Debentures A/c Dr. | 2,00,000 | |||
| To 8% Debentures A/c | 10,00,000 | |||
| To Premium on Redemption of Debentures A/c | 2,00,000 | |||
| (10,000; 8% Debentures of ₹100 each issued at par, redeemable at a premium of ₹20 per debenture) | ||||
| Securities Premium A/c Dr. | 1,25,000 | |||
| Statement of Profit and Loss A/c Dr. | 75,000 | |||
| To Loss on Issue of Debentures A/c | 2,00,000 | |||
| (Loss on issue of debentures written off, using the Securities Premium generated from the earlier issue to Amrit Ltd.) |
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.58 - 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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