Please solve this question

please try to  solve this as soon as possible.


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Quick Summary
This discussion details the accounting treatment for transferring debentures between two companies, A and B. It clarifies how to record the transaction based on acquisition cost rather than the number of shares. The process involves adjusting equity, bank, and cash accounts, and subsequently recalculating outstanding liabilities. Specific journal entries are provided for recognising the transfer and any associated loss on sale.

In the books of B

1.& 2. it doesn’t matter because it used amounts while acquisition and not number of shares data. So, A total equity= Two lakhs worth

By cost of investment a/c two lakhs

To Bank one lakh eighty thousand only 

To Cash twenty thousand

3. While transferring debentures, the par value can be transferred from A the same as this and B will re calculate the outstanding liabilities payable at the end of the year. 

By A a/c (fifty thousand)

To Debentures a/c 

 

In the books of A

By Bank (two lakhs) 

To Sales proceeds 

To recognise the loss,

By loss on sale (fifty thousand)

To Sploci-pl 

then derecognise NB the debentures

By Debentures a/c ( fifty thousand)

To B a/c 

 

Hope this is the right answer

 

Today's Saying -Truth always win .

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