English

Rose Bond Limited purchased a business for Rs. 22,00,000. The purchase price was paid by 6% debentures. Debentures of Rs. 20,00,000 were issued at a premium of 10% for the purpose.

Question

Rose Bond Limited purchased a business for Rs. 22,00,000. The purchase price was paid by 6% debentures. Debentures of Rs. 20,00,000 were issued at a premium of 10% for the purpose. Record necessary journal entries.

Journal Entry

Solution

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Sundry Assets A/c ...Dr.		22,00,000	-
	To Vendor A/c		-	22,00,000
	(Being assets purchased worth ₹ 22,00,000)
2.	Vendor A/c ...Dr.		22,00,000	-
	To 6% Debentures A/c		-	20,00,000
	To Securities Premium A/c		-	2,00,000
	(Being 2,000 debentures of ₹ 100 each issued at 10 % premium)