14(A). X Ltd. purchased a running business from Y Ltd. for a sum of 7 12,00,000
payable R 2,50,000 by cheque and for balance it issued 10% debentures
at a discount of 5%.
The assets and liabilities consisted of the following:
Plant& Machinery
Building
8,00,000
4,00,000
Stock 2,00,000
Debtors 1,60,000
Sundry Creditors 3,00,000
Record necessary journal entries to record these transactions.
[Ans. Capital ReserveT 60,000; 10,000, 10% debentures of7 100 each
@5% discount issued]
Answers
Answer:
ż
Explanation:
ccounting for share capital Important Questions for CBSE Class 12 Accountancy Accounting Treatment of Issue Shares
1.Terms of Issue of Shares
(i) Issue of shares at par When shares are issued at their face value, the shares are said to have been issued at par. i.e. issue price and face value are same.
(ii) Issue of shares at premium When shares are issued at a value that is higher than the face value of the shares, the shares are said to have been issued at premium, i.e. issue price is more than face value.
2.Utilisation of Securities Premium Reserve Section 52 (2) of the Companies Act, 2013 restrict the use of the amount received as premium on securities for the following purposes
(i) In purchasing its own shares (buy back) (Section 77A).
(ii)Issuing fully paid bonus shares to the members (Section 78).
(iii)Writing-off preliminary expenses of the company (Section 78).
(iv)Writing-off the expenses of, or the commission paid or discount allowed on any issue of securities or debentures of the company (Section 78).