So a new company acquired a subsidiary company and the subsidiary owed money to the original parent company. What is the journal entry for the new company for the subsidiary's debt? I'm assuming new parent's entry will be Debit Intercompany Debtors but I am unsure where the other side goes? Please advise. Thanks
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What the entries are will depend on what is agreed to happen to the debt. Of itself, the change in ownership of the shares does not change the indebtedness to the former holding company, so there is nothing to enter. But the former holding company may not want to be a creditor of a company now owned by somebody else, so something might have been agreed, but what was it?
John is right.
The subsidiary still owes money to the old parent company. A change in share ownership doesn't change that.
However, if it made you feel better, and thinking on a statutory footing, the double entry (in the sub) is DR Amounts owed to Group Undertakings, CR Other Creditors.