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Question -

M.Ltd. took over assets of ₹ 9, 00, 00,000 and liabilities of ₹ 70, 00,000 of S.Ltd. and issued 8%Debenture of ₹ 100 each. Record necessary entries in the books of M. Ltd.



Answer -

Books of M. Ltd.

 

Journal

 

Date

Particulars

L.F.

Debit

Amount

Credit

Amount

Sundry Assets

Dr.

9,00,00,000

To Sundry Liabilities A/c

70,00,000

To S.Ltd.

8,30,00,000

(Assets and liabilities of S. Ltd. taken over)

S. Ltd.

Dr.

8,30,00,000

To 8% Debenture A/c

8,30,00,000

(8,30,000 8% debentures @ 100 each issued to S Ltd. in

consideration of assets and liabilities)

 

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