Question

Queen Limited took over the assets of Rs.3,00,000 and liabilities of Rs.10,000 from King &
Co. Ltd., for an agreed purchase consideration of Rs. 2,70,000 to be satisfied by issue of 7% Debentures of Rs. 100 at 20% premium. Show the journal entries in the journal of Queen Limited.​

Answer 1

Answer:

Assets account. dr 300000

To liabilities account. 10000

To King&co. 270000

To capital reserve account. 20000

King &co. dr. 270000

To 7% debenture 225000

To security premium

reserve account. 45000

Explanation:

no. of debenture issued 270000/100+20

=2250