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Samachar India Ltd. took over the assets of Rs 14,00,000 and liabilities of Rs 4,00,000 from News Ltd. for a purchase consideration of Rs 9,19,000. Samachar India Ltd. issued a promissory note of Rs 17,000 payable after 60 days in favour of News Ltd. - Accountancy

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Samachar India Ltd. took over the assets of Rs 14,00,000 and liabilities of Rs 4,00,000 from News Ltd. for a purchase consideration of Rs 9,19,000. Samachar India Ltd. issued a promissory note of Rs 17,000 payable after 60 days in favour of News Ltd. and the balance amount was paid by issue of equity shares of Rs 100 each at a premium of Rs 25 per share.

Pass necessary Journal entries for the above transactions in the books of Samachar India Ltd.

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Solution

                                                                      Samachar Ltd
                                                                          Journal

Date Particulars L.F.

Dr.

Rs

Cr.

Rs

(i)

 

 

 

 

 

(ii)

 

 

 

 

Sundry Assets A/c                                             Dr

               To Sundry Liabilities A/c

               To News Ltd

               To Capital Reserve A/c

(Being purchase of assets and liabilities of News Ltd)

 

News Ltd                                                           Dr

             To Equity Share Capital A/c

            To Securities Premium A/c

            To Bills Payable A/c

(Being 7,216 Equity Shares issued of Rs 100 each at a premium of Rs 25 per share and a promissory note of Rs 17,000)

 

14,00,000

 

 

 

 

 

9,19,000

 

 

 

 

 

 

4,00,000

9,19,000

81,000

 

 

 

7,21,600

1,80,400

17,000

 

 

Working Notes :

WN 1: Calculation of Number of Equity Shares

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

`=(9,02,000)/125=7,216" equity shares"`

Concept: Issue at Par and Premium and at Discount
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