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Issue of Debentures In Consideration Other Then of Cash



Following entries are passed:

 

(a) Sundry assets account

Dr.

[Assets taken over]  

 

To sundry liabilities account

[Liabilities assumed]

 

To vendors account

[Purchase consideration]

 

(Being the assets and liabilities are taken over)

 

(b)  Vendors account

Dr.

 

To debentures account

 

(Being the issue of…debentures to satisfy purchase consideration)

 

Q.5  X company limited issued 14% debentures of the nominal value of Rs. 10,00,000 as follows:

(a) To sundry persons for cash at 90% Rs. 5,00,000 nominal.

(b) To a vendor for Rs. 2,00,000 for purchase of fixed assets – Rs. 2,50,000 nominal.

(c) To the banker as collateral security for a loan of Rs. 1,00,000 – Rs. 2,50,000 nominl.

Pass necessary journal entries.





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