Question - 36

B Ltd. purchased assets of the books value of Rs. 4,00,000 and took over the liability of Rs. 50,000 from mohan Bros. it was agreed that the purchase consideration settled at Rs. 3,80,000 be paid by issuing debentures of Rs. 100 each .

What journal entries will be made in the following three cases, if debentures are issued:

  1. at par 
  2. at discount.
  3. at premium of 10% ? it was agreed that any fraction of debentures be paid in cash.
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