Question

Apoorv Ltd. acquired building worth ₹ 15,50,000, Machinery worth ₹ 11,40,000 and Furniture worth ₹ 1,10,000 from Dhruv Ltd. and took over its liabilities of ₹ 2,00,000 for a purchase consideration of ₹ 25,00,000. Apoorv Ltd. paid the purchase consideration by issuing 12% debentures of ₹ 100 each at a premium of 25%.

Pass the necessary journal entries in the books of Apoorv Ltd. for the above transactions.

Answer 1

Journal
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
	Building A/c    ...Dr.		15,50,000	-
	Machinery A/c    ...Dr.		11,40,000	-
	Furniture A/c    ...Dr.		1,10,000	-
	To Sundry Liabilities A/c		-	2,00,000
	To Dhruv Ltd.		-	25,00,000
	To Capital Reserve A/c (Bal. Fig.)		-	1,00,000
	(Being balance of profit and loss account written off in old ratio)
	Dhruv Ltd.    ...Dr.		25,00,000	-
	To 12% Debentures A/c		-	20,00,000
	To Security Premium A/c		-	5,00,000
	(Being 12% Debentures issued to Dhruv Ltd against purchase consideration)

Working Note:

Calculation of Number of Debentures Issued:

`(25,00,000)/125` = 20,000 Debentures

(Debentures issued at 125 each, including ₹ 25 as security premium)