Query about two entries in case of internal reconstruction?

Hi Ankur.

The very purpose of Internal Reconstruction is to alter your Profit and Loss (Debit balance). It is on the basis of your assumption whether to write off goodwill or not, if not given in the question. GENERALLY, goodwill is written off at the time of reconstruction.

As I already said that Internal Reconstruction is a process of altering you financials, you should not have any deficit for writing off any assets. Hence, you can use your Capital Reserve to knock off the assets to be written off, in case of insufficiency in Reconstruction Account.