K Ltd. Took Over the Assets of Rs.15,00,000 and Liabilities of Rs.5,00,000 of P Ltd. for a Purchase Consideration of Rs.13,68,500. Rs.25,500 Were Paid by Issuing a Promissory Note in Favour of P Ltd. - Accountancy

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K Ltd. took over the assets of Rs.15,00,000 and liabilities of Rs.5,00,000 of P Ltd. For a purchase consideration of Rs.13,68,500. Rs.25,500 were paid by issuing a promissory note in favour of P Ltd. Payable after two months and the balances was paid by issue of equity shares of Rs.100 each at a premium of 25%.

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

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Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)












Sundry Assets A/c                                                                                                                Dr

Goodwill A/c                                                                                                                         Dr

             To Sundry Liabilities A/c

             To P Ltd

(Being assets and liabilities purchased of P Ltd)


P Ltd                                                                                                                                    Dr

        To Equity Share Capital A/c

        To Securities Premium A/c

        To Bills Payable A/c

(Being 10,744 Equity Shares issued of Rs.100 each at a premium of Rs.25 per share and a promissory note of 25,500)

























Working Notes :

WN 1: Calculation of Number of Equity Shares

`"Number of Shares Issued =""Purchase Consideration"/"Issue Price"`


                                      = 10,744 equity shares

Concept: Issue at Par and Premium and at Discount
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2015-2016 (March) All India Set 1

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