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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000?
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book valu...
Answer:
Calculation of consideration paid:
The consideration paid by Taksh Ltd. for the purchase of land and building from Daksh Ltd. is in the form of 10% Debentures of Rs.100 each at a discount of 20%. Let us calculate the amount of consideration paid by Taksh Ltd.
Face value of debentures = Rs.100
Discount offered on debentures = 20%
Discounted value of debentures = Face value - (Discount % * Face value) = Rs.100 - (20% * Rs.100) = Rs.80
Number of debentures issued = Consideration amount / Discounted value of debentures = Rs.5,00,000 / Rs.80 = 6,250 debentures
Therefore, the consideration paid by Taksh Ltd. for the purchase of land and building from Daksh Ltd. is Rs.6,25,000.
Journal entry for the purchase:
The journal entry for the purchase of land and building by Taksh Ltd. from Daksh Ltd. will be as follows:
Land and Building A/c Dr. Rs.5,00,000
To Daksh Ltd. A/c Rs.5,00,000
(Being the purchase of land and building from Daksh Ltd.)
10% Debentures A/c Dr. Rs.6,25,000
Discount on Issue of Debentures A/c Dr. Rs.1,25,000
To Daksh Ltd. A/c Rs.7,50,000
(Being the payment made by issue of debentures)
Credit to the debentures account:
The debentures account will be credited with the face value of the debentures issued by Taksh Ltd. to Daksh Ltd. The face value of the debentures is Rs.100 each and a total of 6,250 debentures have been issued. Therefore, the debentures account will be credited with Rs.6,25,000.
Hence, the answer is (b) Rs.6,25,000.
Calculation of consideration paid:
The consideration paid by Taksh Ltd. for the purchase of land and building from Daksh Ltd. is in the form of 10% Debentures of Rs.100 each at a discount of 20%. Let us calculate the amount of consideration paid by Taksh Ltd.
Face value of debentures = Rs.100
Discount offered on debentures = 20%
Discounted value of debentures = Face value - (Discount % * Face value) = Rs.100 - (20% * Rs.100) = Rs.80
Number of debentures issued = Consideration amount / Discounted value of debentures = Rs.5,00,000 / Rs.80 = 6,250 debentures
Therefore, the consideration paid by Taksh Ltd. for the purchase of land and building from Daksh Ltd. is Rs.6,25,000.
Journal entry for the purchase:
The journal entry for the purchase of land and building by Taksh Ltd. from Daksh Ltd. will be as follows:
Land and Building A/c Dr. Rs.5,00,000
To Daksh Ltd. A/c Rs.5,00,000
(Being the purchase of land and building from Daksh Ltd.)
10% Debentures A/c Dr. Rs.6,25,000
Discount on Issue of Debentures A/c Dr. Rs.1,25,000
To Daksh Ltd. A/c Rs.7,50,000
(Being the payment made by issue of debentures)
Credit to the debentures account:
The debentures account will be credited with the face value of the debentures issued by Taksh Ltd. to Daksh Ltd. The face value of the debentures is Rs.100 each and a total of 6,250 debentures have been issued. Therefore, the debentures account will be credited with Rs.6,25,000.
Hence, the answer is (b) Rs.6,25,000.
Community Answer
Taksh Ltd. purchased land and building from Daksh Ltd. for a book valu...
Correct option is B)
No. of Debentures = Book value of land and building / Issue price of debentures
Issue price of debentures= Rs. 100 - 20
= Rs. 80
No. of debentures= 500000/80
= 6250 debentures
Debentures account will be credited with the amount of 625000 (6250 x 100).
Therefore, B is the correct option.
No. of Debentures = Book value of land and building / Issue price of debentures
Issue price of debentures= Rs. 100 - 20
= Rs. 80
No. of debentures= 500000/80
= 6250 debentures
Debentures account will be credited with the amount of 625000 (6250 x 100).
Therefore, B is the correct option.
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000?
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Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000?.
Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000?.
Solutions for Taksh Ltd. purchased land and building from Daksh Ltd. for a book value of Rs.5,00,000. The consideration was paid by issue of 10% Debentures of Rs.100 each at a discount of 20%. The debentures account will be credited with (a) Rs.6,00,000) Rs.6,25,000 (c) Rs.5,00,000 (d) Rs.5,50,000? in English & in Hindi are available as part of our courses for CA Foundation.
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