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Sandesh Ltd. Took Over the Assets of Rs.7,00,000 and Liabilities of Rs.2,00,000 from Sanchar Ltd. for a Purchase Consideration of Rs.4,59,500. Rs.8,500 Were Paid by Accepting a Draft in Favour of Sanchar Ltd. - Accountancy

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Sandesh Ltd. took over the assets of Rs.7,00,000 and liabilities of Rs.2,00,000 from Sanchar Ltd. for a purchase consideration of Rs.4,59,500. Rs.8,500 were paid by accepting a draft in favour of Sanchar Ltd. payable after three months and the balance was paid by issue of equity shares of `10 each at a premium of 10% in favour of Sanchar Ltd.

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

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Solution

                                                                                  Sandesh Ltd

                                                                                       Journal

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

(i)

 

 

 

 

 

(ii)

 

 

 

 

Sundry Assets A/c

           To Sundry Liabilities A/c

           To Sanchar Ltd A/c

           To Capital Reserve A/c

(Being assets and liabilities purchased of Sanchar Ltd)

 

Sanchar Ltd

             To Equity Share Capital A/c

             To Securities Premium A/c

             To Bank A/c

(Being 41,000 Equity Shares issued of Rs.10 each at a premium of Rs.1 per share and 8,500 by bank draft)

 

7,00,000

 

 

 

 

 

4,59,500

 

 

 

 

 

2,00,000

4,59,500

40,500

 

 

 

4,10,000

41,000

8,500

 

 

Working Notes:

WN1: Calculation of Number of Equity Shares

Number of Shares Issued = Purchase Consideration / Issue Price

                                      = 4,51,000/11

                                      = 41,000 equity shares

Concept: Issue at Par and Premium and at Discount
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