I need some clarificationon the topic:
Facts of the case:
A Ltd & B Ltd will be amalgamated and form a new C Ltd.
Debentures of Rs 100 each:
A ltd : 10% Rs 60 Lakhs
B ltd : 10% Rs 30 Lakhs
Holders of 10% Debentures in A & B Ltd will be paid by C Ltd, such no of 15% Debentures so as to maintain the interest amount.
While Equity Shares will be issued to dispose off the PC.
Now my point is, should I be using the redemption value of Debentures in calculation of Net Assets taken over? I know Debentures wont be a part of PC as per AS.
Should I take book values of 10% Debentures and make entry in the books of C Ltd? Then reverse the entry to dispose off 10% Debentures with 15% Debentures of C Ltd and balance to Capital Reserve?
##Entry -1
Business Purchase A/C Dr.
To Liquidators A/C.
##Entry -2
Now the enrty for Assets & Liabilities:
Sundry Assets A/C Dr
To Sundry Liabilities A/C
##Should I include the redemption values of Debentures or Nominal Amount of Debentures in the above entry -2 ?
Redemtion Values:
A Ltd Rs 40 Lacs
B Ltd: Rs 20 Lacs
CAclubindia
