Question

Raghav Limited purchased a running business from Krishan Traders for a

sum of `15,00,000, payable `3,00,000 by cheque and for the balance issued

9% Debentures of `100 each at par. 4

The assets and liabilities consisted of the following: `

Plant and Machinery 4,00,000

Buildings 6,00,000

Stock 5,00,000

Sundry Debtors 3,00,000

Sundry Creditors 2,00,000

Record necessary journal entries in the books of Raghav Limited.​

Answer 1

Answer:

net assets = (4,00,000 + 6,00,000 + 5,00,000 + 3,00,000 - 2,00,000) = 16,00,000

purchase considereation = 15,00,000

capital reserve = 1,00,000

assets... Dr. 18,00,000

to krishan traders 15,00,000

to liabilities 2,00,000.

to capital reserve 1,00,000

krishan traders., Dr. 15,00,000

to bank 3,00,000

to 9% debenture 12,00,000

no. of debs issued = 12,00,000/100 = 12,000