Kamal Ltd., was formed for purpose of purchasing Rajesh Ltd. and was registered with a nominal capital of Rs 2,00,000 divided into 2,000 equity shares of Rs 100 each. 1,000 shares were issued as fully paid to the vendors in payment of the purchase consideration.

You are required to give necessary journal entries to record the above transactions.

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Solution

In the Books of Kamal Ltd.

$\begin{matrix} Date & Particulars & L.F & Dr (Rs) & Cr. (Rs) Sundry Assets A/c & Dr. & 1, 00, 000 To Rajesh Ltd. & 1, 00, 000 (Assets purchased from Rajesh Ltd.) Rajesh Ltd. & Dr. & 1, 00, 000 To Equity Share Capital A/c & 1, 00, 000 (1,000 shares of Rs 100 each issued to vendors) \end{matrix}$

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In the Books of Kamal Ltd. Date ParticularsL.FDr (Rs)Cr. (Rs)Sundry Assets A/cDr.1,00,000 To Rajesh Ltd.1,00,000(Assets purchased from Rajesh Ltd.)Rajesh Ltd.Dr.1,00,000 To Equity Share Capital A/c1,00,000(1,000 shares of Rs 100 each issued to vendors)