Question

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\%.

Hint:

When issuing debentures at a discount, the discount amount must be recorded separately in the Discount on Issue of Debentures Account.

Answer 1

Journal Entries: \begin{center} \begin{tabular}{|l|c|c|} \hline Particulars & Dr Amount (₹) & Cr Amount (₹)
\hline Assets A/c Dr & 9,00,000 &
Goodwill A/c Dr & 8,00,000 &
To Liabilities A/c & & 3,00,000
To Bank A/c & & 5,00,000
To 8\% Debentures A/c & & 6,36,364
\hline Discount on Issue of Debentures A/c Dr & 63,636 &
To 8\% Debentures A/c & & 63,636
\hline \end{tabular} \end{center}