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Neo Ltd. took over… (Class 12 Accountancy 2026, Q19b)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 3 marks · Short answer

CBSE Class 12 Accountancy 2026: question 19(b)

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, section A, question 19(b), for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q19(b) · 3 marks · Short answerIssue and Redemption of Debentures

Neo Ltd. took over assets of ₹ 25,00,000 and liabilities of ₹ 12,00,000 of Madura Ltd. for a purchase consideration of ₹ 18,00,000. Neo Ltd. issued 11% debentures of ₹ 100 each at a discount of 10% in full satisfaction of the purchase consideration.

Pass necessary journal entries for the above transactions in the books of Neo Ltd.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

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

Hint 1

Compare consideration with net assets.

Hint 2

Each debenture settles ₹ 90 of the consideration.

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. Net assets = 25,00,000 − 12,00,000 = ₹ 13,00,000; consideration ₹ 18,00,000, so goodwill = ₹ 5,00,000. Debentures at ₹ 90: 18,00,000 / 90 = 20,000 debentures, face value ₹ 20,00,000, discount ₹ 2,00,000.

  2. ParticularsDr. (₹)Cr. (₹)
    Sundry Assets A/c Dr.25,00,000
    Goodwill A/c Dr.5,00,000
    To Sundry Liabilities A/c12,00,000
    To Madura Ltd.18,00,000
    (Being assets and liabilities of Madura Ltd. taken over)
    1½ marks
  3. ParticularsDr. (₹)Cr. (₹)
    Madura Ltd. Dr.18,00,000
    Discount on Issue of Debentures A/c Dr.2,00,000
    To 11% Debentures A/c20,00,000
    (Being 20,000 debentures issued at 10% discount)
    1½ marks

Answer: Goodwill ₹ 5,00,000; 20,000 debentures issued: Madura Ltd. ₹ 18,00,000 + Discount ₹ 2,00,000 to 11% Debentures ₹ 20,00,000

Where the marks are

  • Purchase entry with goodwill (1½ marks)
  • Issue of debentures at discount (1½ marks)

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 paper2026 board paper, set 67/1/1: 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.