What journal entries are passed in the books of Transferor company in the case of amalgamation? Explain.

In the case of amalgamation, the transferor company is the company whose assets and liabilities are transferred to another company, called the transferee company. The amalgamation may be either a merger (where both companies dissolve and form a new one) or a consolidation (where one company absorbs another). The accounting treatment for the transferor company depends on the type of amalgamation, whether it is a merger or an acquisition. However, certain general journal entries are passed in the books of the transferor company when the amalgamation occurs.

Here are the journal entries typically passed in the books of the transferor company:

1. Transfer of Assets
   The first step in the amalgamation process is the transfer of assets. All the assets, including fixed assets, current assets, and any other property of the transferor company, are transferred to the transferee company. The journal entry for this would be:

   • Debit: Various asset accounts (such as Plant & Machinery, Land, Buildings, Debtors, etc.)
   • Credit: Amalgamation Reserve or the transferee company’s account (if the transferee company directly issues shares or _________ ___ ________ __________ _______ _______ _______.
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