Question

Sumi Ltd. acquired assets of ₹ 8,00,000 and took over sundry creditors of ₹ 2,00,000 from Pandora Ltd. for a purchase consideration of ₹ 9,00,000. The payment was made by issuing a cheque of ₹ 4,60,000 and the remaining by issue of 9\% Debentures of ₹ 100 each at a premium of 10\%.

Hint:

When issuing debentures at a premium, ensure the premium is separately recorded in the Premium on Debentures Account.

Answer 1

Journal Entries: \begin{center} \begin{tabular}{|l|c|c|} \hline Particulars & Dr Amount (₹) & Cr Amount (₹)
\hline Assets A/c Dr & 8,00,000 &
To Sundry Creditors A/c & & 2,00,000
To Bank A/c & & 4,60,000
To 9\% Debentures A/c & & 4,50,000
\hline 9\% Debentures A/c Dr & 4,50,000 &
To Premium on Debentures A/c & & 50,000
\hline \end{tabular} \end{center}