Question 26 Chapter 9 of +2-Part-1
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
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement