Entries to be passed in the books of purchasing Company (In the Nature of Purchase)
1.
When
a business is acquired
Business Purchase A/c Dr
To Liquidators of
Selling Co
2.
When
Asset are incorporated in the books of Accounts
Asset A/c Dr
Goodwill A/c Dr
To Liability A/c
To Business Purchase
To Capital Reserve
3.
When
Purchase Consideration is paid
Liquidators A/c Dr
To Equity Share Capital
To Bank A/c
Journal Entries in the books of Purchasing Company (In the Nature of Merger)
4.
When
a business is acquired
Business Purchase A/c Dr
To Liquidators of
Selling Co
5.
When
Asset are incorporated in the books of Accounts
Asset A/c Dr
Goodwill A/c Dr
To Liability A/c
To Business Purchase
To Capital Reserve
6.
When
Purchase Consideration is paid
Liquidators A/c Dr
To Equity Share Capital
To Bank A/c
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