Question

On 1st April, 2024, Zeba Ltd. purchased a running business having a net worth of ₹ 2,00,000 from Ajay Ltd. for a purchase consideration of ₹ 2,10,000. The payment was made as follows:

1. By issuing 9,000, 10% Debentures of ₹ 10 each at a premium of 20%.
2. Balance by accepting a Bills of Exchange payable after 3 months.

You are required to pass journal entries in the books of Zeba Ltd.
(Ignore interest on Debentures).

Answer 1

Journal entries in the books of Zeba Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.4.2024	Assets A/c   ...Dr.		2,00,000	-
	Goodwill A/c   ...Dr.		10,000	-
	To Ajay Ltd.		-	2,10,000
	(Being a running business purchased)
1.4.2024	Ajay Ltd.   ...Dr.		1,08,000	-
	To 10% Debenture A/c		-	90,000
	To Securities Premium A/c		-	18,000
	(Being 10% Debentures issued at 20% Premium)
1.4.2024	Ajay Ltd.   ...Dr.		1,02,000	-
	To Bill Payable		-	1,02,000
	(Being balance paid through Bills of Exchange)