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Question 18 Chapter 9 of +2-A
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18. Bright Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Star Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 12% Debentures of ₹ 100 each. Give necessary Journal entries in the books of Bright Ltd., assuming that:
Case (a): The debentures are issued at par.
Case (b): The debentures are issued at 20% premium.
Case (c): The debentures are issued at 10% discount.
The solution of Question 18 Chapter 9 of +2-A: –
| Date | Particulars | L.F. | Debit | Credit | |
| Assets A/c | Dr | 6,60,000 | |||
| Goodwill A/c | Dr | 20,000 | |||
| To Liabilities A/c | 80,000 | ||||
| To Star A/c | 6,00,000 | ||||
| (Being business purchased from star ltd. ) | |||||
| Star Ltd A/c | Dr | 60,000 | |||
| To Cash A/c | 60,000 | ||||
| (Being B.P received) | |||||
| ( a ) | Star Ltd. A/c | Dr | 5,40,000 | ||
| To 12%Debenture A/c | 5,40,000 | ||||
| (Being Debenture Issued) | |||||
| ( b ) | Star Ltd. A/c | Dr | 5,40,000 | ||
| To 12%Debenture A/c | 4,50,000 | ||||
| To securities premium A/c | 90,000 | ||||
| (Being Debenture Issued) | |||||
| ( c ) | Star Ltd. A/c | Dr | 5,40,000 | ||
| Discount on issue of Debenture A/c | Dr | 60,000 | |||
| To 12%Debenture A/c | 6,00,000 | ||||
| (Being Debenture Issued) | |||||
Working Note
| No of Debenture to be issued | = | Purchase consideration | = | 5,40,000 | = | 4,500 shares |
| Issue price | 120 |
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| No of Debenture to be issued | = | Purchase consideration | = | 5,40,000 | = | 6,000 shares |
| Issue price | 90 |
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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
