Question

Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.

Answer 1

Solution:

                                            Books of Romi Ltd.

                                                Journal Entries  

Particulars                                                           Debit Rs.       Credit Rs.

Assets A/c                                            Dr.          20.00,000

      To Creditors Ac                                                                 2,00,000

      To Kapil Enterprises A/c                                                   18,00,000

(Being assets purchased and Creditors took over from Kapil Enterprises )

Kapil Enterprises A/c                              Dr.        18,00,000

Discount on Issue of Debentures A/c     Dr.      2,00,000

           To 8%Debenture A/c                                                    20,00,000

(Being issued 20,00 8% Debentures of Rs.100 each at discount of 10% to Kapil Enterprises)  

Working Note:  

Numbers of Debentures Issued = $\frac{Purchase Consideration}{Issue Price}$

                                                     = $\frac{18,00,000}{100- 10}$ = 20,000 debentures