Question

Lotus Ltd. took over assets of ₹ 2,50,000 and liabilities of ₹ 30,000 of Goneby Company for the purchase consideration of ₹ 3,30,000. Lotus Ltd. paid the purchase consideration by issuing debentures of ₹ 100 each at 10% premium.
Give journal entries in the books of Lotus Ltd.

Answer 1

Books of Lotus Ltd.
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Assets A/c	Dr.		2,50,000
	Goodwill A/c (balancing figure)	Dr.		1,10,000
	To Sundry Liabilities A/c				30,000
	To Goneby Company A/c				3,30,000
	(Business purchased of Goneby Company)
	Goneby Company A/c	Dr.		3,30,000
	To Debenture A/c				3,00,000
	To Securities Premium A/c				30,000
	(Issued 3,000 debentures at 10% premium)

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