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प्रश्न
Answer in a sentence only.
What is meant by ‘Issue of debenture at discount and redeemable at premium’?
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उत्तर
When debentures are issued at a price below their face value, it is known as ‘issue of debentures at discount’. ‘Redemption of debentures at premium’ implies that such debentures will be paid off a redemption price that is more than its face value. For example, a debenture with face value of Rs 10, issued at Rs 9 (issued at discount of Re 1) and redeemable at Rs 12 (redeemed at a premium of Rs 2).
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संबंधित प्रश्न
'Ananya Ltd' had an authorized capital of Rs 10,00,00,000 divided into 10,00,000 equity shares of Rs 100 each. The company had already issued 2,00,000 shares. The dividend paid per share for the year ended 31.3.2007 was Rs 30. The management decided to export its products to African countries. To meet the requirements of additional funds, the finance manager put up the following three alternate proposals before the Board of Directors:
(1) Issue 47,500 equity shares at a premium of Rs 100 per share.
(2) Obtain a long-term loan from the bank which was available at 12% per annum.
(3) Issue 9% debentures at a discount of 5%.
After evaluating these alternatives the company decided to issue 1,00,000, 9% debentures on 1.4.2008. The face value of each debenture was Rs 100. These debentures were redeemable in four installments starting from the end of the third year, which was as follows:
| Year | Rs |
| III | 10,00,000 |
| IV | 20,00,000 |
| V | 30,00,000 |
| VI | 40,00,000 |
Prepare 9% debenture account from 1.4.2008 till all the debentures were redeemed.
The issue of debenture more than the face value is termed as an issue of debenture at par.
Karan and Varun were partners in a firm sharing profits and losses in the ratio of 1 : 2. Their fixed capitals were Rs, 2,00,000 and Rs 3,00,000 respectively. On 1st April, 2016 Kishore was admitted as a new partner for 14th14th share in the profits. Kishore brought Rs 2,00,000 for his capital which was to be kept fixed like the capitals of Karan and Varun. Kishore acquired his share of profit from Varun.
Calculate goodwill of the firm on Kishore's admission and the new profit sharing ratio of Karan, Varun and Kishore. Also, pass necessary Journal Entry for the treatment of Goodwill on Kishore's admission considering that Kishore did not bring his share of goodwill premium in Cash.
Narain Laxmi Ltd. invited applications for issuing 7500, 12% Debentures of Rs100 each at a premium of Rs 35 per Debenture. The full amount was payable on application.
Applications were received for 10,000 Debentures. Applications for 2500 Debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.
X Ltd. redeemable 100, 6% Debentures of Rs 100 each by converting them into Equity Shares of Rs 100 each. The 6% Debentures were redeemable at 10% premium for which the Equity Shares were issued at 25% premium. Pass the necessary Journal entries for the redemption of above mentioned debentures in the books of X Ltd.
Sarvottam Ltd. Decided to redeem its 1250, 12% Debentures of Rs 100 each. It purchased 850 Debentures from the open market at Rs 96 per Debenture. The remaining Debenture were redeemed out of profit. The company has already made a provision for Debenture Redemption Reserve in its books.
Pass necessary Journal entries in the books of the company for the above transaction.
X Ltd. obtained a loan of Rs. 4,00,000 from IDBI Bank. The company issued 5,000, 9% Debentures of Rs. 100 each as collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.
DN Ltd. issued 50,000 shares of Rs 10 each at a discount of 10% payable as Rs 2 per share on application Rs 3 on allotment and Rs 2 each on first and final call. Applications were received for 70,000 shares. It was decided that
(a) Refuse allotment to the applicants of 10,000 shares,
(b) Allot 10,000 shares to Mohan who had applied for a similar number, and
(c) Allot the remaining share on a pro-rata basis.
Mohan failed to pay the allotment money and Sohan who belonged to category (c) and was allotted 3,000 shares, paid both the calls with allotment, Calculate the amount received on allotment.
Devi Ltd., on 1st April 2006 acquired assets of the value of Rs 6,00,000 and liabilities worth Rs 70,000 from P & Co., at an agreed value of Rs 5,50,000. Devi Ltd. issued 12% Debentures of Rs 100 each at a premium of 10% in full satisfaction of purchase consideration. The Debentures were redeemable 3 years later at a premium of 5%. Pass entries to record the above including redemption of debentures.
Select most appropriate alternative from those given below :
The issue of debenture at its face value is called the issue ___________.
Select most appropriate alternative from those given below :
The issue of debentures more than face value is called___________.
Hero Ltd. purchased plant and machinery for ₹ 18,00,000 from Pearl Machines Ltd. payable ₹ 3,00,000 by drawing a promissory note and the balance by the issue of 9% debentures of ₹ 100 each at a premium of 20%.
Pass the necessary journal entries in the books of Hero Ltd. for the above transactions.
Agam Ltd. issued 40,000 9% debentures of ₹ 100 each on April 1, 2018, at a discount of 10%, redeemable at a premium of 10%. Assuming that the interest was paid half-yearly on September 30 and March 31 and the tax deducted at source was 10%, give journal entries relating to debenture interest for the half-year ended March 31, 2019.
On 1st April, 2012, Neptune Finance Company (a listed NBFC) issued 4,000, 9% Debentures of ₹ 100 each to be redeemed at a premium of 5% on 31st March, 2021.
You are required to pass necessary journal entries for the issue and redemption of debentures.
Savitri Ltd. issued 50,000, 8% Debentures of ₹ 100 each at a certain rate of premium to be redeemed at a 10% premium. At the time of writing off Loss on Issue of Debentures, Statement of Profit and Loss was debited with ₹ 2,00,000. At what rate of premium, these debentures were issued?
Durga Ltd. issued 80,000, 10% Debentures of ₹ 100 each at a certain rate of discount and were to be redeemed at a 20% premium. Existing balance of Securities Premium before issuing of these debentures was ₹ 25,00,000 and after writing off Loss on the Issue of Debentures, the balance in Securities Premium was ₹ 5,00,000. At what rate of discount, these debentures were issued?
Health2Wealth Ltd. had share capital of ₹ 80,00,000 divided in shares of ₹ 100 each and 20,000, 8% Debentures of ₹ 100 each as part of capital employed. The company need additional funds of ₹ 55,00,000 for which they decided to issue debentures in such a way that they got required funds after issuing debentures of the same class as earlier, at 10% premium. These debentures were to be redeemed at 20% premium after 4 years. These debentures were issued on 01 October, 2021.
You are required to
- Pass entries for issue of Debentures.
- Prepare Loss on Issue of Debentures Account assuming there was existing balance of Securities Premium Account of ₹ 2,80,000.
- Pass entries for Interest on debentures on March 31, 2022 assuming interest is payable on 30 September and 31 March every year.
Pass necessary journal entries for the issue of debentures in the following cases :
- Issued ₹ 75,00,000, 9% debentures of ₹100 each at a premium of 10% redeemable at a premium of 5% after 3 years.
- Issued 8,000, 9% debentures of ₹100 each at a discount of 6% redeemable at a premium of 3% after 5 years.
- Issued 90,000, 9% debentures of ₹100 each at par, redeemable at par after 4 years.
On 1st April 2022, Galaxy ltd. had a balance of ₹8,00,000 in Securities Premium account. During the year company issued 20,000 Equity shares of ₹10 each as bonus shares and used the balance amount to write off Loss on issue of Debenture on account of issue of 2,00,000, 9% Debentures of ₹100 each at a discount of 10% redeemable @ 5% Premium. The amount to be charged to Statement of P & L for the year for Loss on issue of Debentures would be:
Alexa Ltd. purchased building from Siri Ltd for ₹ 8,00,000. The consideration was paid by issue of 6% debentures of ₹ 100 each at a discount of 20%. The 6% Debentures account is credited with ______.
On July 01, 2022, Panther Ltd. issued 20,000, 9% Debentures of ₹ 100 each at 8% premium and redeemable at a premium of 15% in four equal instalments starting from the end of the third year. The balance in Securities Premium on the date of issue of debentures was ₹ 80,000. Interest on debentures was to be paid on March 31 every year.
Pass Journal entries for the financial year 2022-23. Also prepare Loss on Issue of Debentures account.
On 1st April, 2023, Ruth Ltd. purchased Plant and Machinery for ₹ 11,00,000 from Pablo Ltd. payable as to ₹ 1,00,000 by accepting a promissory note and the balance by an issue of 11% Debentures of ₹ 100 each at a premium of 10% to be redeemed at a premium of 2 % after six years. You are required to pass journal entries in the books of Ruth Ltd. only to record the payment made to Pablo Ltd.
The following balances have been extracted from the books of Nirvana Ltd, as at 31st March, 2024:
| Particulars | (₹) | Particulars | (₹) |
| Security deposit for electricity for ten years | 30,000 | Uncalled amount on partly paid-up shares | 8,00,000 |
| Underwriting commission | 20,000 | 10% Debentures | 5,00,000 |
| General Reserve | 70,000 | Statement of P/L (Dr.) | 10,000 |
| Fixed Deposits | 2,00,000 | Calls-in arrears @ ₹ 1 per share | 40,000 |
| Premium on redemption of Debentures | 20,000 | Securities Premium | 2,00,000 |
| Equity Share Capital (1,00,000 shares of ₹ 10 each) |
10,00,000 |
You are required to show the above items in Notes to Accounts accompanying the Balance Sheet of Nirvana Ltd. prepared as per Schedule III of the Companies Act 2013 as at 31st March, 2024.
