Question

2,000 Equity Shares of ₹ 10 each were issued to Moon Limited from whom assets of ₹ 25,000 were acquired. Pass Journal entry.

Answer 1

Journal Entries in the Books of the Company
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Sundry Assets A/c   ...Dr.		25,000
	To Moon Ltd. A/c			20,000
	To Capital Reserve A/c			5,000
	(Assets acquired from Moon Ltd. for ₹ 20,000, resulting in Capital Reserve)
2.	Moon Ltd. A/c   ...Dr.		20,000
	To Equity Share Capital A/c			20,000
	(2,000 Equity Shares of ₹ 10 each issued to Moon Ltd. at par in full settlement)

Working Note:

Value of assets acquired = ₹ 25,000

Value of shares issued:

2,000 × ₹ 10 = ₹ 20,000

Capital Reserve:

₹ 25,000 − ₹ 20,000 = ₹ 5,000