Question

On 1st April, 2017, Solar Power Ltd. issued 10,000, 8% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 15% at the end of five years. All the debentures were subscribed and allotment was made. The company had balance in Securities Premium Reserve of ₹ 80,000.
Prepare the Balance Sheet (extract) as at 31st March, 2018.

Answer 1

In the books of Solar Power Ltd. An Extract of Balance Sheet As at 31st March, 2018
Particulars	Note No.	Amount (₹)
I. Equity and liabilities
1. Shareholders’ Funds
Reserves and Surplus	3	(1,20,000)
2. Non-Current Liabilities
a. Long-term Borrowings	1	10,00,000
b. Other long-term	2	1,50,000
II. Assets
Current Assets
Cash and Cash Equivalents	4	9,50,000

Notes to Accounts:

Note No.	Particulars	Amount (₹)	Amount (₹)
1.	Long-term Borrowings
	10,000, 8% Debentures of ₹100 each issued		10,00,000
2.	Other long-term Liabilities
	Premium on Redemption of Debentures		1,50,000
3.	Reserves and Surplusc
	Securities Premium Reserve	80,000
	Less: Discount on Issue of Debentures	(50,000)
	Less: Loss on Issue of Debentures written off	(30,000)
	Statement of Profit and Loss	–
	Less: Loss on Issue of Debentures written off	(1,20,000)	(1,20,000)
4.	Cash and Cash Equivalents
	On 8% debentures @ ₹ 95 each (10,000 × 95)		9,50,000