Divya Ltd. purchased machinery worth ₹ 1,20,000 and building worth ₹ 2,00,000 from Tara Ltd. for consideration other than cash at an agreed purchase consideration of ₹ 3,00,000 to be satisfied by the issue of 3,000, 12%

In the Books of Divya Limited Journal Entries Particulars (Amount in ₹) (Amount in ₹) 1. Building A/c Dr. 2,00,000 Plant and Machinery A/c Dr. 1,20,000 To Tara Ltd 3,00,000 To Capital Reserve A/c 20,000 (Being Purchase of Sundry Assets and transfer of Capital Profits as per agreement with the vendor dated.....) 2. Tara Ltd Dr. 3,00,000 To 12% Debentures A/c. 3,00,000 (Being 3,000, 12% Debentures of ₹ 100 each allotted to vendors for consideration other than cash as per Board resolution dated.... Note: If the value of debentures allotted is less than the agreed purchase price, the difference is to be credited to Capital Reserve Account.