Question

Goodwill Co. Ltd., took over the assets Rs. 1,75,000 and

Liabilities of Rs. 15,000 of Raj & Co. for the purchase

consideration of Rs. 1,65,000. Goodwill Co. Ltd., paid the

purchase consideration by issuing debenture of Rs. 100 each at a

premium of 10%. Give the Journal Entries​

Answer 1

Answer:

Assets. account. dr 175000

Goodwill account dr. 5000

To liabilities account. 15000

To Raj &co. 165000

Raj &co. dr. 165000

To debenture account. 150000

To securities premium

reserve account. 15000

Explanation:

Number of debenture issued = 165000÷110=1500

purchase consideration = assets - liabilities

= 175000- 15000

=160000

but co. paid 165000 to vendor ₹5000 paid for goodwill