Question 21:
Gundola Ltd. took over assets of ₹9,00,000 and
liabilities of ₹3,00,000 from AK Ltd. for an agreed purchase
consideration of ₹14,00,000. The payment was made through a bank draft of
₹5,00,000 and the remaining by issue of 8% Debentures at a discount of
10%.
Record necessary Journal entries in the books of
Gundola Ltd. for the above transactions. (CBSE 2024)
Answer:
|
In the book of
Gundola Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
|
Goodwill A/c |
Dr. |
|
8,00,000 |
|
|
|
Assets A/c |
Dr. |
|
9,00,000 |
|
|
|
To
Liabilities A/c |
|
|
|
3,00,000 |
|
|
To AK Ltd.
A/c |
|
|
|
14,00,000 |
|
|
(Being assets and liabilities taken over from AK
Ltd.) |
|
|
|
|
|
|
AK Ltd. A/c |
Dr. |
|
14,00,000 |
|
|
|
Discount on Issue of Debentures A/c |
Dr. |
|
1,00,000 |
|
|
|
To Bank A/c |
|
|
|
5,00,000 |
|
|
To 8%
Debentures A/c |
|
|
|
10,00,000 |
|
|
( Being purchase consideration has been paid by bank
draft and by issuing debentures at discount) |
|
|
|
|
Note: The face value of the debentures has not been provided in
the question. Hence, the computation of the number of debentures is not
possible. Despite this, the published answer in the book specifies the number
of debentures.
Question 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.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Assets
A/c |
Dr. |
|
4,00,000 |
|
|
|
Goodwill
A/c (balancing figure) |
Dr. |
|
30,000 |
|
|
|
To Liabilities A/c |
|
|
50,000 |
|
|
|
To Mohan Bros. A/c |
|
|
3,80,000 |
|
|
|
(Asset
and liabilities purchased from Mohan Bros.) |
|
|
|
|
|
|
|
|
|
|
|
Case 1When Debentures are issued at Par
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Mohan
Bros. |
Dr. |
|
3,80,000 |
|
|
|
To Debenture A/c |
|
|
3,80,000 |
|
|
|
(Issued
3,800 debentures at par) |
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Number of debentute to be issued= Purchase
consideration/issue price =3,80,000/100 =3,800 Debentures
Case 2When Debentures are issued at 10% discount
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Mohan
Bros. |
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 |
|
|
|
(Issued
4,222 Debentures of ₹ 100 each at 10% discount to Mohan Bros. and
fraction of debentures is paid in cash) |
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Number of debentute to be issued= Purchase
consideration/issue price =3,80,000/100-10
=18,00,000/90=4,222.2 Debentures
Case 3When Debentures
are issued at 10% premium
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Mohan
Bros. |
Dr. |
|
3,80,000 |
|
|
|
To Debenture A/c |
|
|
3,45,400 |
|
|
|
To Securities Premium
A/c |
|
|
34,540 |
|
|
|
To Bank A/c |
|
|
60 |
|
|
|
(Issued
3,454 Debentures of ₹ 100 each at 10% premium to Mohan Bros. and
fraction of debentures is paid in cash) |
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Number of debentute to be issued= Purchase
consideration/issue price =3,80,000/100+10
=18,00,000/110=3454.6 Debentures
Question
23:
Rama Ltd. took over following assets and liabilities of Krishna Ltd. on 1st
April, 2019:
|
|
₹ |
|
Land and
Building |
50,00,000 |
|
Furniture |
10,00,000 |
|
Stock |
5,00,000 |
|
Creditors |
7,00,000 |
The purchase consideration of ₹ 60,00,000 was paid by issuing 12%
Debentures of ₹ 100 each at a premium of 20%.
Pass the necessary Journal entries for the above in
the books of Rama Ltd. (CBSE 2020)
Answer:
|
Books of B Ltd. |
|||||
|
Journal |
|||||
|
Date |
Particular |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Goodwill
A/c Land
and Building A/c Furniture
A/c Stock
A/c |
Dr. Dr. Dr. Dr. |
|
2,00,000 50,00,000 10,00,000 5,00,000 |
|
|
|
To Krishna Ltd.’s A/c To Creditors A/c |
|
|
60,00,000 7,00,000 |
|
|
|
(Being
purchase of plant) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Krishna Ltd.’s A/c Dr. |
|
60,00,000 |
|
|
|
|
To 9% Debentures A/c |
|
|
50,00,000 |
|
|
|
To Securities Premium
Reserve A/c |
|
|
10,00,000 |
|
|
|
(Being
12% 50,000 Debentures issued of ₹ 100 each at a premium of 20% to
Vendors for purchase of plant costing ₹ 6,00,000 at ₹120) |
|
|
|
|
|
|
|
|
|
||
Question 24:
Anthony Ltd. issued
20,000, 9% Debentures of ₹100 each at 10% discOunt to Mithoo Ltd. from
whom Assets of ₹23,50,000 and
Liabilities of ₹6,00,000 were taken over. Pass entries in the books of
Anthony Ltd., if these debentures were to be redeemed at 5% premium. (CBSE
Sample Paper 2023)
Answer:
|
Books of Anthony Ltd. |
|||||
|
Journal |
|||||
|
Date |
Particular |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Goodwill
A/c |
Dr. |
|
50,000 |
|
|
Assets
A/c |
23,50,000 |
||||
|
|
To Mithoo Ltd.’s A/c |
|
|
18,00,000 |
|
|
To Liabilities A/c |
6,00,000 |
||||
|
|
(Being
purchase of plant) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Krishna Ltd.’s A/c Dr. |
|
18,00,000 |
|
|
|
|
Loss
on Issue of debenture A/c
Dr. |
|
2,00,000 |
||
|
Discount
on Issue of debenture A/c
Dr. |
1,00,000 |
||||
|
To 9% Debentures A/c |
20,00,000 |
||||
|
|
To Premium on redemption
of debenture A/c |
|
1,00,000 |
||
|
|
(Being
9% 20,000 Debentures issued of ₹100 each at a Discount of 9% to Vendors
for taking over of assets costing ₹ 23,50,000 and liabilities of ₹ 6,00,000 redeemable at 5% Premium) |
|
|
|
|
|
|
|
|
|
||
Question 25:
Green
Ltd. purchased the assets of Strong Ltd. for ₹ 40,00,000 and took over
liabilities of 7,00,000 at an agreed value of ₹ 32,40,000. Payment was
made by issuing 10% Debentures of 100 each at a discount of 10%. Pass the
necessary Journal entries in the books of Green Ltd.
Answer:
|
In the books of Green Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
|
Sundry Assets A/c |
Dr. |
|
40,00,000 |
|
|
|
To Sundry Liabilities A/c |
|
|
|
7,00,000 |
|
|
To Strong Ltd. |
|
|
|
32,40,000 |
|
|
To Capital Reserve A/c |
|
|
|
60,000 |
|
|
(Being the purchase of business of
Strong Ltd.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Strong Ltd. A/c |
Dr. |
|
32,40,000 |
|
|
|
Discount on Issue of Debentures
A/c (36,000×10) |
Dr. |
|
3,60,000 |
|
|
|
To 10% Debentures A/c |
|
|
|
36,00,000 |
|
|
(Being 36,000, 10% debentures
issued as purchase consideration) |
|
|
|
|
Working Notes:
Number of Debentures issued= (32,40,000/90) = 36,000 debentures
Ts Grewal Solution 2025-2026
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Class 12 / Volume – 2