Issue of Debentures other than Cash Exam Based Problems and Answers

Issue of debentures other than cash exam based problems and questions are the BEST collection of problems for sure shot success in the examination.

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BUSINESS PURCHASE

PROBLEM: 8

AX Company Ltd purchased assets of $/₹/Rs 4,00,000 and took over the liabilities of Rs 50,000. It fixed the purchase price of Rs 3,75,000 and decided to issue debentures of Rs 100 each at a premium of 10%.

Required: Journal entries

[Answer: Goodwill = Rs 25,000; No. of debentures = 3,409]

Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 9

AF Company Ltd purchased assets of $/₹/Rs 4,60,000 and took over the liabilities of Rs 30,000. It agreed to pay Rs  4,05,000 by issuing debentures of Rs 100 each at a discount of 10%.

Give journal entries in the books of purchasing company.

[Answer: Capital reserve = Rs 25,000; No. of debentures = 4,500]

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Here, Amount = Rs = $ = £ = € = ₹ = Af = ৳ = Nu = Rf = රු = 

PROBLEM: 10

AK Company Limited took over the following assets and liabilities of B Company Limited at an agreed purchase price of $/₹/Rs 450,000.

The company paid the purchase consideration by issuing 8% debenture of Rs 100 each at 10% discount.

Required: Journal entries     

[Answer:  Capital reserve = Rs 30,000; No. of debentures (450,000 ÷ 90) = 5,000]

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