Exe Ltd. Purchased assets of ₹ 8,40,000 and took over liabilities of ₹ 80,000 of Whe Ltd. at a value of ₹ 7,20,000. Exe Ltd. Issued 10% Debentures of ₹ 100 each at 10 % Discount in full satisfaction of the price. The company decided to weite off discount on Issue of Debentures from Securities Premium Reserve of ₹ 1,00,000. Pass Journal entries in the books of Exe Ltd.

Explanation

Notes:
1. Calculation of the number of debentures:
₹ 7,20,000/ ₹ 90 = 8000 debentures of ₹ 100 each.
`:.` Debentures issued are of ₹ 8,00,000 at a discount of 106,i.e., ₹ 80,000.
2. Capital Reserve = Net Assets (i.e., Sundry Assets - Sundry Liabilities ) - Purchase Consideration
= ₹ (8,40,000 - ₹ 7,20,000 = ₹ 40,000