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\%.
Pass necessary journal entries for the above transactions in the books of Sumi Ltd.

Hint:

For transactions involving asset purchase through liabilities and securities issuance: 1. Record assets and liabilities taken over. 2. Record the payment made via bank and securities issuance. 3. Account for premium in the Securities Premium Account.

Answer 1

\[ \begin{array}{|p{2cm}|p{6cm}|r|r|} \hline Date & Particulars & Dr (₹) & Cr (₹)
\hline \text{2023 April 1} & \text{Assets A/c} & 8,00,000 &
& \text{Sundry Creditors A/c} & 2,00,000 &
& \text{To Pandora Ltd. A/c} & & 9,00,000
& \multicolumn{3}{l|}{\textit{(Being purchase of assets and assumption of liabilities from Pandora Ltd.)}}
\hline \text{2023 April 1} & \text{Pandora Ltd. A/c} & 9,00,000 &
& \text{To Bank A/c} & & 4,60,000
& \text{To 9\% Debentures A/c} & & 4,00,000
& \text{To Securities Premium A/c} & & 40,000
& \multicolumn{3}{l|}{\textit{(Being payment made partly in cash and balance through issuance of 9\% Debentures at 10\% premium)}}
\hline \end{array} \] \normalsize