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

\[ \begin{array}{|p{2cm}|p{6cm}|r|r|} \hline \textbf{Date} & \textbf{Particulars} & \textbf{Dr (₹)} & \textbf{Cr (₹)} \\ \hline \text{2023 April 1} & \text{Purchase of assets and assumption of liabilities from Pandora Ltd.} & & \\ & \text{Assets A/c} & 8,00,000 & \\ & \text{Sundry Creditors A/c} & 2,00,000 & \\ & \text{To Pandora Ltd. A/c} & & 9,00,000 \\ \hline \text{2023 April 1} & \text{Payment to Pandora Ltd. for purchase of assets and liabilities} & & \\ & \text{Pandora Ltd. A/c} & 9,00,000 & \\ & \text{To Bank A/c (Cash Payment)} & & 4,60,000 \\ & \text{To 9\% Debentures A/c (Issued at 10\% premium)} & & 4,00,000 \\ & \text{To Securities Premium A/c} & & 40,000 \\ \hline \end{array} \] ormalsize