Star Ltd. Took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Moon Ltd. For ₹ 6,00,000 . Give necessary Journal entries in the books of Star Ltd. Assuming that:
Case (a): The purchase consideration was payable 10% in cash and the balance in 5,400, 12% Debentures of ₹ each.
Case (b): The pruchase consideration was payable 10% in cash and the balance in 4,500, 12% Debentures of ₹ 100 each issued at 20% premium.
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Correct Answer - Entry in both Cases: De. Sundry Assets A/c - ₹ 6,60,000 and Goodwill A/c - ₹ 20,000;
Cr. Sundry Liabilities A/c ₹ 80,000 and Moon Ltd. - ₹ 6,00,000.
Case(a): Dr. Moon Ltd. - Mood Ltd - ₹ 6,00,000; Cr Cash/ Bank A/c - ₹ 60,000 and 12% Debentures A/c - ₹ 5,40,000.
Case (b): Dr. Moon Ltd. - ₹ 6,00,000; Cr. Cash/Bank A/c - ₹ 60,000; 12% Debentures A/c - ₹ 4,50,000 and
Securities Premium Reserve A/c - ₹ 90,000.