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Accountancy · 2024 · 3 marks
Issue and Redemption of DebenturesIssue of Debentures for Consideration other than Cash3 marksshort answer
CBSE 2024 · Region 1 · Set 2 · Q20
Sunrise Ltd. acquired assets of ₹ 3,60,000 and took over creditors of ₹ 1,00,000 from Moonlight Ltd. for an agreed purchase consideration of ₹…
Sunrise Ltd. acquired assets of ₹ $\displaystyle 3{,}60{,}000$ and took over creditors of ₹ $\displaystyle 1{,}00{,}000$ from Moonlight Ltd. for an agreed purchase consideration of ₹ $\displaystyle 4{,}80$,000. Sunrise Ltd. issued $\displaystyle 9$% Debentures of ₹ $\displaystyle 100$ each at a discount of $\displaystyle 4$% in satisfaction of the purchase consideration. Pass necessary journal entries in the books of Sunrise Ltd. Show your workings clearly.
Grapple Ltd. took over assets of ₹ $\displaystyle 25{,}00{,}000$ and liabilities of ₹ $\displaystyle 5{,}00{,}000$ from Allore Ltd. for an agreed purchase consideration of ₹ $\displaystyle 18{,}00$,000. Grapple Ltd. issued $\displaystyle 11$% Debentures of ₹ $\displaystyle 100$ each at $\displaystyle 20$% premium in satisfaction of the purchase consideration. Pass necessary journal entries in the books of Grapple Ltd. Show your workings clearly.
Marking-scheme solution
In the books of Sunrise Ltd.
JOURNAL
Date Particulars L.F Dr. Cr.
Amount Amount
(₹) (₹)
Sundry Assets A/c Dr.
$\displaystyle 3{,}60{,}000$
Goodwill A/c Dr.
To Creditors A/c $\displaystyle 1{,}00{,}000$
$\displaystyle 2{,}20{,}000$
To Moonlight Ltd $\displaystyle 4{,}80{,}000$
(Assets acquired and liabilities taken
over from Moonlight Ltd)
_____________________________
$\displaystyle 4{,}80{,}000$
Moonlight Ltd. Dr.
Discount on Issue of
$\displaystyle 20{,}000$
Debentures A/c Dr.
To $\displaystyle 9$% Debentures A/c
$\displaystyle 5{,}00{,}000$
(Purchase consideration settled by
issuing $\displaystyle 5{,}000$ $\displaystyle 9$% debentures at $\displaystyle 4$%
discount)
_____________________________
Working Note:
No. of debentures = (Purchase Consideration) / Issue Price
= $\displaystyle 4{,}80{,}000$/ $\displaystyle 96$ = $\displaystyle 5{,}000$
Q. Grapple Ltd. took over assets of ₹$\displaystyle 25{,}00{,}000$…..
Ans. In the books of Grapple Ltd.
JOURNAL
Date Particulars L.F. Dr. Amount Cr. Amount
(₹) (₹)
Sundry Assets A/c Dr. $\displaystyle 25{,}00{,}000$
To Liabilities A/c $\displaystyle 5{,}00{,}000$
To Allore Ltd $\displaystyle 18{,}00{,}000$
To Capital Reserve $\displaystyle 2{,}00{,}000$
(Assets acquired and liabilities
taken over from Allore Ltd)
Allore Ltd. Dr. $\displaystyle 18{,}00{,}000$
To $\displaystyle 11$% Debentures A/c $\displaystyle 15{,}00{,}000$
To Securities Premium $\displaystyle 3{,}00{,}000$
(Purchase consideration settled
by issuing $\displaystyle 15{,}000$ $\displaystyle 11$%
debentures at $\displaystyle 20$% premium)
_________________________
Working Note:
No. of debentures = (Purchase Consideration) / Issue Price
= $\displaystyle 18{,}00{,}000$/ $\displaystyle 120$
= $\displaystyle 15{,}000$
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CBSE Class 12 Accountancy past-paper question from the 2024 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.