Journal entries tranfer company

Amalgamation, Absorption & External Reconstructionn

1. Journal Entries
In the Books of Transfer Company
1For transfering Assets to Realisation A/c
Realisation A/c Dr.xxx
To Sundry Assets a/c xxx
2For tranfering Liabilities Taken Over
Liabilities A/c Dr.xxx
To Realisation A/c xxx
3For Purchase Consideration Receivable
Purchasing Company A/c Dr.xxx
To Realisation A/c xxx
4For Receiving the Purchase Consideration
Bank A/c Dr.xxx
Shares in Purchasing Co A/c Dr.xxx
Debentures in Purchasing Co A/c Dr.xxx
To Purchasing Co A/c xxx
5For Realising Assets not Taken Over
Bank A/c Dr.xxx
To Realisation A/c xxx
To Assets A/c xxx
6For Payment of Liabilities Not Taken over
Liabilty A/c Dr.xxx
Realisation A/c (Any Premium on
Repayment) Dr.xxx
To Bank A/c (Actual Amt Paid)xxx
To Realisation A/c xxx
7For Payment of Realisation Expenses
a)Borne by Selling Company
Realisation A/c Dr.xxx
To Bank A/c xxx
b)Borne by Purchasing Company
Purchasing Company A/c Dr.xxx
To Bank A/c xxx
c)
Expenses are reimbursed by Purchasing
Company
Bank A/c Dr.xxx
To Purchasing Company A/c xxx
8For Discharging the debentures
a)Repayable @ Discount

2. Debenture A/c Dr.xxx
To Realisation A/c xxx
To Debenture Holder A/c xxx
b)At Premium
Debenture A/c Dr.xxx
Realisation A/c Dr.xxx
To Debenture Holder A/c xxx
c)Payment to Debenture Holders
Debenture Holder A/c Dr.xxx
To Bank A/c xxx
To Debentures in Purchasing
Company A/c xxx
9For Discharge of Preference Share Capital
a)At Premium
Pref Sharecapital A/c Dr.xxx
Realisation A/c Dr.xxx
To preference Shareholders A/cxxx
b)At Discount
Pref Sharecapital A/c Dr.xxx
To Realisation A/c xxx
To preference Shareholders A/cxxx
c)For Payment
Pref Shareholder A/c Dr.xxx
To Bank A/c xxx
To shares in Purchasing Company
A/c xxx
10For Transfer of Equity Share Capital
a)Accumulated Losses Profit
Equity Share Capital A/c Dr.xxx
General Reserve A/c Dr.xxx
Profit or Loss A/c Dr.xxx
Any other Reserves A/c Dr.xxx
To Equity Shareholders A/c xxx
11Transfer of Accumulated Losses
Equity shareholders A/c Dr.xxx
To Profit or loss A/c xxx
To Preliminary Exp A/c xxx
To discount on Issue of Shares A/cxxx
12For Realisation Profit or Loss
a)Profit

3. Realisation A/c Dr.xxx
To Equity Shareholders a/c xxx
b)Loss
Equity Shareholders A/c Dr.xxx
to Realisation A/c xxx
13Final Payment to Equity Shareholders
Equity Shareholders A/c Dr.xxx
To Bank A/c xxx
To Shares in Purchasing Company
A/c xxx
Formula:
1Net Asset Method:
Net Asset= Agreed Value of Assets Taken
over- Agreed Value of LiabilitesTaken Over
2Share Exchange Method or Intrinsic Value
IV = Assets Available for Equity
Shareholders/ No of Equity Shares