Question 8 of 16
Q.Joy Ltd. purchased the following assets from the Bijoy Ltd.: Building ₹ 4,00,000, Machinery ₹ 2,00,000, Stock ₹ 1,50,000. Bijoy Ltd. was paid for such purchases ₹ 1,50,000 by cheque and the balance by issue of 12% Debentures of ₹ 100 per debenture at a premium of 25%. Pass necessary Journal entries in the books of Joy Ltd.
West Bengal WbchseWBCHSE West Bengal HS (Class-12) Commerce Board 2019Subjective· 4mImportance★★★★★est
50% · 8/16 Questions
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Start your 14-day free trial to unlock the full solution →Purchase consideration = 4,00,000 + 2,00,000 + 1,50,000 = 7,50,000. Paid 1,50,000 by cheque; balance 6,00,000 by 12% Debentures of 100 at 25% premium (125 each) = 4,800 debentures (face 4,80,000 + premium 1,20,000).
Working (West Bengal HS Accountancy — issue of debentures for consideration other than cash):
- Total assets taken over = Building 4,00,000 + Machinery 2,00,000 + Stock 1,50,000 = 7,50,000.
- Less paid by cheque = 1,50,000. Balance settled by debentures = 6,00,000.
- Issue price per debenture = 100 + 25% = 125. Number of debentures = 6,00,000 / 125 = 4,800.
- Face value = 4,800 x 100 = 4,80,000; Securities Premium = 4,800 x 25 = 1,20,000.
Books of Joy Ltd. — Journal entries:
| Date | Particulars | Dr (Rs) | Cr (Rs) |
|---|---|---|---|
| Building A/c ... Dr | 4,00,000 | ||
| Machinery A/c ... Dr | 2,00,000 | ||
| Stock A/c ... Dr | 1,50,000 | ||
| To Bijoy Ltd. A/c | 7,50,000 | ||
| (Being assets purchased from Bijoy Ltd.) | |||
| Bijoy Ltd. A/c ... Dr | 1,50,000 | ||
| To Bank A/c | 1,50,000 |
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