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Question
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.
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Solution
| Books of Anthony Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
| 1. | Assets A/c ...Dr. | 23,50,000 | ||
| Goodwill A/c ...Dr. | 50,000 | |||
| To Liabilities A/c | 6,00,000 | |||
| To Mithoo Ltd. A/c | 18,00,000 | |||
| (Business purchased of Mithoo Ltd. comprising of Assets and Liabilities) | ||||
| 2. | Mithoo Ltd. A/c ...Dr. | 18,00,000 | ||
| Loss on Issue of Debentures A/c ...Dr. | 3,00,000 | |||
| To 9% Debentures A/c | 20,00,000 | |||
| To Premium on Redemption of Debentures A/c | 1,00,000 | |||
| (Debentures issued to Mithoo Ltd. at Discount, redeemable at Premium) | ||||
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