Question 26 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 26 Chapter 9 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 26 Chapter 9 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

26. (Different Cases of Debentures issues for Purchase Consideration other the Cash)
X Ltd. Took over the assets of Rs. 3,00,000 and Liabilities of Rs. 10,000 of Y Ltd. For agreed purchase consideration of Rs. 2,70,000 to be satisfied by the issue of 15% Debentures of Rs. 100 each at 20% premium. Show the necessary journal entries in t Journal of X Ltd.
(b) Z. Ltd. Allotted 3,000 15% Debentures of Rs. 100 each at a discount of 10% to USA Ltd. For supplying Technical know-how. Give the necessary Journal entries.

The solution of Question 26 Chapter 9 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit ₹ Credit ₹
i Sundry Assets A/c Dr.   3,00,000  
  To Sundry Liabilities A/ c       10,000
  To Y Ltd.       2,70,000
  To Capital Reserve A/ c (WN)       20,000
  (Being the purchase of Assets & liabilities from Y Ltd. As per agreement dated)      
         
ii Y Ltd. A/c Dr.   2,70,000  
  To 15% Debenture A/c     2,25,000
  To Securities Premium Reserve A/c     45,000
  (Being the issue of 2250 debentures of Rs. 100 each at premium of 20%)      
         

b) Z Ltd. Allotted 3,000 15% debentures of Rs. 100 each at a discount of 10% to USA Ltd. For supplying Technical know –how .give necessary journal entries

Journal
Date   Particulars
L.F. Debit ₹ Credit ₹
i Technical Know-how A/c Dr.   2,70,000  
  Discount on Debentures A/ c     30,000  
  To 15% Debenture A/c     3,00,000
  (Being technical know-how purchased & payment made by issue of debentures at 10 % discount.)      
         

Working Note :-

Capital Reserve = (Assets –Liabilities ) – Purchase Consideration

(3,00,000-10,000)-2,70,000 = ₹ 20,000

It all about Question 26 Chapter 9 of +2-Part-1, If you have any problem please comment below.

Issue of Debentures from the point of view of Redemption

You can also Check out the solved question of other Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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