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.
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"`
