Question

reliable ltd sold fixed assets of rs 50,000 and took over plant of rs.5,00,000 at an agreed value of rs 3,80,000 from perfect ltd.
reliable ltd issued debentures at 5 percent discount in full satisfaction of the purchase price.pass journal entries in books of both buyers and sellers

Answer 1

Dear Student ,

(It is assumed that Face Value of Debentures is Rs.100 )

In Buyers Book

Journal

Date	Particulars	LF	Amount (Rs.)	Amount (Rs.)
	Plant A/c Dr.		500000
	To Fixed Assets A/c			50000
	To Perfect Ltd. A/c			380000
	To Capital Reserve A/c			70000
	( Being plant was purchased )
	Perfect Ltd. A/c Dr.		380000
	loss on issue of debentures A/c Dr.		20000
	To Debentures A/c			400000
	( Being Debentures issued to seller)

In case of Seller

Journal

Date	Particulars	LF	Amount (Rs.)	Amount (Rs.)
	Fixed Assets A/c Dr.		50000
	Reliable Ltd.A/c Dr.		380000
	Goodwill A/c Dr.		70000
	To Plant. A/c			500000
	( being business was purchased)
	Debentures A/c Dr.		400000
	To Reliable Ltd. A/c			380000
	To Capital Reserve A/c			20000
	(being debentures received by the Reliable ltd.)

Regards.