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Drum Ltd. decided… (Class 12 Accountancy SQP 2026-27, Q19)

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AccountancyCBSE Class 12 · Sample paper, session 2026-27 · 3 marks · Short answer

CBSE Class 12 Accountancy sample paper 2026-27: question 19

From the official CBSE sample question paper for 2026-27, section A, question 19, for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q19 · 3 marks · Short answerIssue and Redemption of Debentures

Drum Ltd. decided to expand its operations by acquiring the business of Crane Ltd. and agreed to take over assets worth ₹6,00,000 and liabilities worth ₹40,000 at an agreed purchase consideration of ₹6,30,000

The purchase consideration was discharged by issuing 10% Debentures of ₹100 each at 10% discount to Crane Ltd.

On the basis of above information:
I. Calculate the number of debentures issued to discharge the purchase consideration.
II. Pass necessary journal entries in the books of Drum Ltd.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2026-27.

Hints

Open one hint at a time and try again before the next.

Hint 1

Divide the consideration by the issue price.

Hint 2

Consideration above net assets is goodwill.

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. I. Debentures issued at ₹ 90 each: number = ₹ 6,30,000 / ₹ 90 = 7,000 debentures.

    1 mark

  2. II. Net assets = ₹ 6,00,000 − ₹ 40,000 = ₹ 5,60,000; consideration ₹ 6,30,000, so goodwill = ₹ 70,000.

    ParticularsDr. (₹)Cr. (₹)
    Sundry Assets A/c Dr.6,00,000
    Goodwill A/c Dr.70,000
    To Sundry Liabilities A/c40,000
    To Crane Ltd.6,30,000
    (Being business purchased)
    1 mark

  3. Debentures issued at ₹ 90 (discount ₹ 10 each).

    ParticularsDr. (₹)Cr. (₹)
    Crane Ltd. Dr.6,30,000
    Discount on Issue of Debentures A/c Dr.70,000
    To 10% Debentures A/c7,00,000
    (Being 7,000 debentures issued at 10% discount)
    1 mark

Answer: 7,000 debentures; Assets ₹ 6,00,000 and Goodwill ₹ 70,000 Dr. to Liabilities ₹ 40,000 and Crane Ltd. ₹ 6,30,000; Crane Ltd. ₹ 6,30,000 and Discount ₹ 70,000 Dr. to 10% Debentures ₹ 7,00,000

Where the marks are

  • Number of debentures (1 mark)
  • Purchase entry with goodwill (1 mark)
  • Issue of debentures at discount (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Issue and Redemption of Debentures, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2026-27: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.