Question:medium

Gundola Ltd. took over assets of ₹ 9,00,000 and liabilities of ₹ 3,00,000 from AK Ltd. for an agreed purchase consideration of ₹ 14,00,000. The payment was made through a bank draft of ₹ 5,00,000 and the remaining by issue of 8\% Debentures at a discount of 10\%.

Show Hint

When issuing debentures at a discount, the discount amount must be recorded separately in the Discount on Issue of Debentures Account.
Updated On: Jan 13, 2026
Show Solution

Solution and Explanation

Journal Entries: \begin{center} \begin{tabular}{|l|c|c|} \hline Particulars & Debit Amount (₹) & Credit Amount (₹) \hline Assets Account (Dr) & 9,00,000 & Goodwill Account (Dr) & 8,00,000 & To Liabilities Account & & 3,00,000 To Bank Account & & 5,00,000 To 8% Debentures Account & & 6,36,364 \hline Discount on Issue of Debentures Account (Dr) & 63,636 & To 8% Debentures Account & & 63,636 \hline \end{tabular} \end{center}
Was this answer helpful?
0

Top Questions on Miscellaneous