A company purchased a running business from M/s. Rai Brothers for a sum of ₹ 15,00,000 payable ₹ 12,00,000 in fully paid shares of ₹ 10 each and balance through cheque.
The assets and liabilities consisted of the following:

Plant ₹ 4,00,000 Stock ₹ 4,00,000

Building ₹ 4,00,000 Cash ₹ 3,00,000

Sundry Debtors ₹ 3,00,000 Sundry Creditors ₹ 2,00,000

You are required to pass necessary journal entries in the company's books.

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Plant and Machinery

Dr.

4,00,000

Building A/c

Dr.

4,00,000

Sundry Debtors A/c

Dr.

3,00,000

Stock A/c

Dr.

4,00,000

Cash A/c

Dr.

3,00,000

To Sundry Creditors A/c

2,00,000

To M/s Rai Brothers

15,00,000

To Capital Reserve A/c

1,00,000

(Business of M/s Rai Brothers took over)

M/s Rai Brothers

Dr.

12,00,000

To Share Capital A/c

12,00,000

(Shares issued to M/s Rai Brothers)

M/S Rai Brothers

Dr.

3,00,000

To Bank A/c

3,00,000

(Payment made to M/s Rai Brothers through cheque)

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Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs

	Plant and Machinery	Dr.		4,00,000
	Building A/c	Dr.		4,00,000
	Sundry Debtors A/c	Dr.		3,00,000
	Stock A/c	Dr.		4,00,000
	Cash A/c	Dr.		3,00,000
	To Sundry Creditors A/c				2,00,000
	To M/s Rai Brothers				15,00,000
	To Capital Reserve A/c				1,00,000
	(Business of M/s Rai Brothers took over)

	M/s Rai Brothers	Dr.		12,00,000
	To Share Capital A/c				12,00,000
	(Shares issued to M/s Rai Brothers)

	M/S Rai Brothers	Dr.		3,00,000
	To Bank A/c				3,00,000
	(Payment made to M/s Rai Brothers through cheque)