Romi Ltd acquired assets of Rs 20 lakh and took over creidtors of Rs 2 lakh from kapil Enterprises.Romi Lktd. Issued 8% debentures of Rs 100 each at par as puchase consideraion.Record necessary jounal entries in the books of Romi Ltd.

Explanation

In case of the whole business being taken over if the amount of debentures issued is more than the maount of the net assets tken over the diifference (excess) will be treated as value of goodwill and the same shll also be debite while pasing the jornal entry for the purchase of vender business (see Illustration 1) .But if it is the other way round i.e the value of debentures is less than the value of the net assets taken over the differnece will be creidited to capital Reserve accounts (See Illustration 12).