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\%.
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\%.
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When issuing debentures at a premium, ensure the premium is separately recorded in the Premium on Debentures Account.
Updated On: Jan 13, 2026
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Solution and Explanation
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}
\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}
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