Question

Sure Ltd. 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 and Machinery	₹ 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.

Answer 1

Books of Sure Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	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)