Solution
R Ltd. purchased the assets of S Ltd. for Rs. 5,00,000. It also agreed to take over the liabilities of S Ltd. amounted to Rs. 2,00,000 for a purchase consideration of Rs. 2,80,000. The payment of S Ltd. was made by issue of 9% Debentures of Rs. 100 each at par. Pass necessary journal entries in the books of R Ltd.