Question 22 Chapter 9 of +2-A – T.S. Grewal 12 Class

Question 22 Chapter 9 of +2-A

Question 22 Chapter 9 of +2-A

22. Exe Ltd. purchased the assets of the book value  ₹4,00,000 and took over the liabilities of ₹ 50,000 from Mohan Bros.It was agreed that the  purchase consideration ,settled at  ₹3,80,000 be paid by issuing debentures  of ₹ 100 each.
Pass journal entries if debenture are issued:
(a) at par
(b) at a discount of 10% and
(c) at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash..

The solution of Question 22 Chapter 9 of +2-A: – 

         
Date Particulars
L.F. Debit Credit
  Assets A/c Dr   4,00,000  
  Goodwill A/c Dr   30,000  
  To Liabilities A/c       50,000
  To Mohan Bros A/c       3,80,000
  (Being assets and liabilities purchased from Mohan Bros. )        
  When Debenture issued at par        
  Mohan Bros A/c Dr   3,80,000  
  To Debenture A/c       3,80,000
  (Being Debenture issued at securities premium)        

Working Note

 

No of Debenture to be issued  = Purchase consideration = 3,80,000 =  3,800 debentures
Issue price 100

 

 

Date Particulars
L.F. Debit Credit
  Assets A/c Dr   4,00,000  
  Goodwill A/c Dr   30,000  
  To Liabilities A/c       50,000
  To Mohan Bros A/c       3,80,000
  (Being assets and liabilities purchased from Mohan Bros. )        
  When Debenture issued at 10% Discount        
  Mohan Bros A/c Dr   3,80,000  
  Discount on Issue of Debenture A/c Dr   42,220  
  To Debenture A/c       4,22,200
  To Bank A/c       20
  (Being Debenture issued at securities premium)        

 

 

No of Debenture to be issued  = Purchase consideration = 3,80,000 = 4,222 debentures
Issue price 90

 

 

Date Particulars
L.F. Debit Credit
  Assets A/c Dr   4,00,000  
  Goodwill A/c Dr   30,000  
  To Liabilities A/c       50,000
  To Mohan Bros A/c       3,80,000
  (Being assets and liabilities purchased from Mohan Bros. )        
  When Debenture issued at 10% premium        
  Mohan Bros A/c Dr   3,80,000  
  To Debenture A/c       3,45,400
  To Securities Premium A/c       34,540
  To Bank A/c       60
  (Being Debenture issued at securities premium)        

 

 

No of Debenture to be issued  = Purchase consideration = 3,80,000 = 3,454.6 Debentures
Issue price 110

 

 


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Also, Check out the solved question of previous Chapters: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 2 min - Question 22 Chapter 9 of +2-A - T.S. Grewal 12 Class

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