K Ltd. took over the assets of ₹1500000 and Liabilities of ₹500000 of P Ltd. for a purchase consideration of 1368500. ₹25500 were paid by issuing promissory note in favour of P Ltd. payable after two months and the balance was paid by issue of equity shares of ₹100 each at a premium of 25%. Pass necessary journal entries for the above transactions in the books of K Ltd.
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Sundry assets A/C Dr. 1500000
Goodwill A/C (balancing fig.) Dr. 368500
To Sundry liabilities A/C. 500000
to P Ltd. A/C. 1368500
P Ltd. A/C. DR. 1368500
To B/R. A/C. 25500
To E. Share A/C. 1074400
To S. Premium A/C. 268600
Goodwill A/C (balancing fig.) Dr. 368500
To Sundry liabilities A/C. 500000
to P Ltd. A/C. 1368500
P Ltd. A/C. DR. 1368500
To B/R. A/C. 25500
To E. Share A/C. 1074400
To S. Premium A/C. 268600
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Answer:
Explanation:
Sundry assets A/C Dr. 1500000
Goodwill A/C (balancing fig.) Dr. 368500
To Sundry liabilities A/C. 500000
to P Ltd. A/C. 1368500
P Ltd. A/C. DR. 1368500
To B/R. A/C. 25500
To E. Share A/C. 1074400
To S. Premium A/C. 268600
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