Question

Vedesh Ltd. purchased a running business of Vibhu Enterprises for a sum of ₹ 12,00,000. Vedesh Ltd. paid ₹ 60,000 by drawing a promissory note in favour of Vibhu Enterprises., ₹1,90,000 through bank draft and balance by issue of 8% debentures of ₹ 100 each at a discount of 5%. The assets and liabilities of Vibhu Enterprises consisted of Fixed Assets valued at ₹ 17,30,000 and Trade Payables at ₹ 3,20,000. You are required to pass necessary journal entries in the books of Vedesh Ltd.

Answer 1

In the Books of Vedesh Ltd. Journal
Date	Particulars	L.F.	Dr. Amount (₹)	Cr. Amount (₹)
	Fixed Assets A/c      Dr.		17,30,000
	To Trade Payables A/c			3,20,000
	To Vibhu Enterprises			12,00,000
	To Capital Reserve A/c  (Being assets purchased and liabilities taken over of Vibhu Enterprises)			2,10,000
	Vibhu Enterprises  Dr.	12,00,000
	Discount on Issue of Debentures A/c Dr.	50,000
	To Bills Payable A/c			60,000
	To Bank A/c			1,90,000
	To 8% Debentures A/c (Being issue of bank draft, acceptance of bill and issue of 8% debentures in settlement of purchase consideration}			10,00,000

Working Note:

Number of Debentures issued

= `(9,50,000)/95`

= 10,000