Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.

Open in App

Solution

Books of Romi Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

Assets A/c

Dr.

20,00,000

To Creditors A/c

2,00,000

To Kapil Enterprises

18,00,000

(Assets purchased and Creditors took over from Kapil Enterprises)

Kapil Enterprises

Dr.

18,00,000

Discount on Issue of Debentures A/c

Dr.

2,00,000

To 8% Debentures A/c

20,00,000

(Issued 20,000 8% Debentures of Rs 100 each at discount of 10% to Kapil Enterprises)

Working Note:

Suggest Corrections

Similar questions

Q. Green Ltd. purchased the assets of Strong Ltd. for ₹ 40,00,000 and took over liabilities of 7,00,000 at an agreed value of ₹ 32,40,000. Payment was made by issuing 10% Debentures of 100 each at a discount of 10%. Pass the necessary Journal entries in the books of Green Ltd.

Q. Bright Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Star Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 12% Debentures of ₹ 100 each. Give necessary Journal entries in the books of Bright Ltd., assuming that:
Case (a): The debentures are issued at par.
Case (b): The debentures are issued at 20% premium.
Case (c): The debentures are issued at 10% discount.

Q. 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.

Q. X Ltd . took over the assets of ₹ 6,00,000 and liabilities of ₹ 80,000 of Y Ltd for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 12% Debentures of ₹ 100 each . Give necessary journal entries in the books of X Ltd., assuming that:
Case (a): The debentures are issued at par.
Case (b): The debentures are issued at 20% premium.
Case (c): The debentures are issued at 10% discount.

M Ltd took over assets of Rs.9,00,00,000 and liabilities of Rs.70,00,000 of S Ltd and issued 8% Debentures of Rs.100 each. Record necessary entries in the books of M Ltd.

Join BYJU'S Learning Program

Books of Romi Ltd.
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Assets A/c	Dr.		20,00,000
	To Creditors A/c				2,00,000
	To Kapil Enterprises				18,00,000
	(Assets purchased and Creditors took over from Kapil Enterprises)

	Kapil Enterprises	Dr.		18,00,000
	Discount on Issue of Debentures A/c	Dr.		2,00,000
	To 8% Debentures A/c				20,00,000
	(Issued 20,000 8% Debentures of Rs 100 each at discount of 10% to Kapil Enterprises)

Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises. Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration. Record necessary journal entries in the books of Romi Ltd.

Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.