Question

Hassan Limited took a loan of Rs. 30,00,000 from a bank against primary security worth Rs. 40,00,000 and issued 4,000, 6% debentures of Rs. 100 each as collateral security. The company again, after one year, took a loan of Rs. 50,00,000 from the bank against the plant as primary security and deposited 6,000 6% debentures of Rs. 100 each as collateral security. Record necessary journal entries and prepare the balance sheet of the company.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c   ...Dr.		30,00,000	-
	To Bank Loan A/c		-	30,00,000
	(Being a bank loan of Rs. 30,00,000 raised against primary security)
2.	Debenture Suspense A/c   ...Dr.		4,00,000	-
	To 6% Debentures A/c		-	4,00,000
	(Being 4,000, 6% debentures of Rs. 100 each issued as collateral security)
3.	Bank A/c   ...Dr.		50,00,000	-
	To Bank Loan A/c		-	50,00,000
	(Being the second bank loan of Rs. 50,00,000 raised against the plant)
4.	Debenture Suspense A/c   ...Dr.		6,00,000	-
	To 6% Debentures A/c		-	6,00,000
	(Being 6,000, 6% debentures of Rs. 100 each issued as collateral security)

 

Balance Sheet of Hassan Limited (Extract)
Particulars	Note No.	Amount (₹)
I. EQUITY AND LIABILITIES
1. Non-Current Liabilities
(a) Long-term borrowings	1	80,00,000
Total		80,00,000
II. ASSETS
1. Current Assets
(a) Cash and cash equivalents (Bank)	2	80,00,000
Total		80,00,000

Notes to Accounts:

Note No.	Particulars	Amount (₹)	Amount (₹)
1	Long-term Borrowings
	Bank Loan (Secured against primary assets and Rs. 10,00,000 collateral debentures)		80,00,000
	6% Debentures	10,00,000
	Less: Debenture Suspense A/c	(10,00,000)	Nil
	Total Long-term Borrowings		80,00,000
2	Cash and Cash Equivalents
	Cash at Bank (30,00,000 + 50,00,000)		80,00,000