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sajay kumar (Querist)
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22 December 2010 : x-purchasing company
y-selling company
please explain me wht it saying?
the issue of such as amount of fully paid 14 percent debentures inx ltd at 96 percent as is sufficient to discharge 12 percent debentures I y ltd. At a premium of 20 percent

experts what 96 percent saying ? how to deal this?

CA. R. B. SAH

CA. R. B. SAH (Expert)
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22 December 2010 96% means paid up value of debenture.

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sajay kumar

sajay kumar (Querist)
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22 December 2010 but he is saying isue of fully paid debentures

CA. R. B. SAH

CA. R. B. SAH (Expert)
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23 December 2010 suppose debenture of Y is Rs.100 then agreed consideration is 120 i.e. at 20% premium.then 120 shall be considered 96%.

Entries

Purchase consideration Dr. 120
To Y ltd. 120

Y lTD. Dr. 120
Discount on Debenture Dr. 5
To 14% Debenture 125

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