CBSE 2025, Set 1

Question

(b) Prime Ltd. took over assets of ₹ 6,00,000 and liabilities of ₹ 1,00,000 of Rabi Ltd. for a purchase consideration of ₹ 3,60,000. Prime Ltd. issued 10% debentures of ₹ 100 each at a discount of 10% in full satisfaction of purchase consideration.

Pass necessary journal entries in the books of Prime Ltd.

Edvaya · Accepted Answer

The correct answer is Subjective. **Journal Entries (Books of Prime Ltd.):** | Date | Particulars | L.F. | Dr. Amount (₹) | Cr. Amount (₹) | |---|---|---|---|---| | | Assets A/c ...Dr.     To Liabilities A/c     To Rabi Ltd.     To Capital Reserve A/c (Balancing figure) (Assets and liabilities of Rabi Ltd. taken over) | | 6,00,000 | 1,00,000 3,60,000 1,40,000 | | | Rabi Ltd. ...Dr. Discount on issue of debentures A/c ...Dr.     To 10% Debentures A/c (Issue of 4,000 debentures at a discount of 10%) | | 3,60,000 40,000 | 4,00,000 | *Working Note: Number of Debentures to be issued = Purchase Consideration / Issue Price = 3,60,000 / 90 = 4,000 Debentures.*

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Accountancy > Accounting For Companies > Issue Of Debentures

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