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Kiara Ltd. purchased… (Class 12 Accountancy 2026, Q19a)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/5/1 · 3 marks · Short answer

CBSE Class 12 Accountancy 2026: question 19(a)

Set in the CBSE Class 12 board exam of 2026, paper 67/5/1, section A, question 19(a), for 3 marks. Try it first; the hints and our step-by-step solution are below.

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

Kiara Ltd. purchased assets worth ₹ 12,40,000 and took over liabilities of ₹ 3,40,000 of Amrex Ltd. for a purchase consideration of ₹ 11,00,000. Kiara Ltd. paid half the amount by cheque. The balance amount was settled by issuing 9% debentures of ₹ 100 each at a premium of 10%.
Pass necessary journal entries for the above transactions in the books of Kiara Ltd.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/5/1.

Hints

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

Hint 1

Compare consideration with net assets.

Hint 2

Debentures at 10% premium are issued at ₹ 110 each.

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 = 12,40,000 − 3,40,000 = ₹ 9,00,000; consideration ₹ 11,00,000, so goodwill = ₹ 2,00,000. Half (₹ 5,50,000) is paid by cheque; the other ₹ 5,50,000 by debentures at ₹ 110: 5,000 debentures = ₹ 5,00,000 face + ₹ 50,000 premium.

  2. ParticularsDr. (₹)Cr. (₹)
    Sundry Assets A/c Dr.12,40,000
    Goodwill A/c Dr.2,00,000
    To Sundry Liabilities A/c3,40,000
    To Amrex Ltd.11,00,000
    (Being assets and liabilities of Amrex Ltd. taken over)
    1 mark
  3. ParticularsDr. (₹)Cr. (₹)
    Amrex Ltd. Dr.11,00,000
    To Bank A/c5,50,000
    To 9% Debentures A/c5,00,000
    To Securities Premium A/c50,000
    (Being consideration paid by cheque and 5,000 9% debentures of ₹ 100 at 10% premium)

    The payment may also be shown as two entries: cheque ₹ 5,50,000, and debentures ₹ 5,00,000 with premium ₹ 50,000.

    2 marks

Answer: Goodwill ₹ 2,00,000; Amrex Ltd. paid ₹ 5,50,000 by cheque and 5,000 debentures (₹ 5,00,000 + premium ₹ 50,000)

Where the marks are

  • Purchase entry with goodwill ₹ 2,00,000 (1 mark)
  • Payment by cheque and debentures at premium (2 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 67/5/1: 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.