Question

M.Ltd. took over assets of Rs 9,00,00,000 and liabilities of Rs 70,00,000 of S.Ltd. and issued 8%Debenture of Rs 100 each. Record necessary entries in the books of M. Ltd.

Answer 1

Answer is liabilities Rs 30,00,000

Answer 2

Explanation:

1. Sundry Assets A/c  Dr.  9,00,000,00

To Sundry Liabilities A/c  70,00,000

To S Ltd A/c  83,00,0000

(Being Assets and Liabilities of S taken over)

2. S Ltd A/c  Dr.  83,00,000,00

To 8% Debenture A/c  83,00,0000

(Being 8,30,000 8% Debentures at 100 each issued to S Ltd.)

Amount payable to S by M = 830,000,00

8% Debentures at 100 each issued to be issued = 8,300,0000/100

= 8,30,000