Romi Ltd purchased building worth ₹1,50,000, machinery ₹1,40,000 and furniture worth ₹10,000 from xyz co. and took over its liabilities of ₹20,000 for a purchase consideration of ₹3,15,000. They paid the purchase consideration by issuing 12% debentures of ₹100 each at a premium of 5%.

What will be the number of debentures issued by Romi Ltd?

3,000

The correct answer is option 3- 3,000.

Journal entry passed for the purchase of business is as follows-
Building      Dr.    ₹1,50,000
Machinery  Dr.     ₹1,40,000
Furniture    Dr.    ₹10,000
Goodwill     Dr.    ₹35,000 (Balancing figure)
       To Liabilities              ₹20,000
       To xyz co.                  ₹3,15,000
(Assets purchased from xyz co.)

Purchase consideration of ₹3,15,000 is paid by issuing debentures of ₹100 at a premium of 5%.
Issue price of debenture = 100 + premium
                                        = 100 + (100 x 5/100)
                                        = 100 + 5
                                        = ₹105

No of debentures issued = Purchase consideration / Issue price of debenture
                                        = 3,15,000 /105
                                        = 3,000