Question

When the purchasing company bears
the liquidation expenses, it will debit
the expenses to​

Answer 1

Answer:

If the purchasing company is required to pay the expenses of liquidation of the vendor company, the amount should be debited to the goodwill or capital reserve account, as the case may be.

Journal entry for the liquidation expenses paid by the transferee company is :

  Goodwill/Capital reserve A/c             Dr.

          To Cash A/c

Explanation: