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Issue of Debentures In Consideration Other Then of Cash

Following entries are passed:


(a) Sundry assets account


[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



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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