TS Grewal solutions for अकाऊंटन्सी डबल एंट्री बूक कीपिंग वॉल्यूम १ अँड २ [इंग्रजी] इयत्ता १२ chapter 9 - Issue of Debentures [Latest edition]

Debentures in respect of which all details including names, addresses and particulars of holding of the debentureholders are entered in a register kept by the company are called ______.

Debentures on which a company does not give any undertaking for the repayment of money borrowed are called ______.

Debentures repayable after 12 months or after the period of Operating Cycle from the date of Balance Sheet are shown in the Balance Sheet of a company under the head of ______.

At the time of issue of debentures, if amount is received in parts, Debentures Account is ______.

When debentures are issued at a discount, the discount is written off ______.

The debentures which are payable on the expiry of a specified period either in lumpsum or in instalments during the lifetime of the company are known as ______ debentures.

Excess value of net assets over purchase consideration at the time of purchase of business is ______.

If the amount of debentures issued is more than the amount of the net assets taken over by a company, the difference will be treated as ______.

On 1st April, 2022, Mega Ltd. issued 30,000, 10% Debentures of ₹ 100 each at a discount of 10%. The total amount of interest due on debentures for the year ending 31st March, 2023 will be ______.

Amul Ltd. purchased building of Mother Dairy Ltd. for ₹ 40,00,000. The consideration was paid by issue of 10% Debentures of ₹ 1,000 each at a discount of ₹ 200. 10% Debentures Account is credited with ______.

Maharaja Ltd. took over assets of ₹ 15,00,000 and liabilities of ₹ 2,00,000 of Dolphin Ltd. for an agreed purchase consideration of ₹ 12,60,000. It was agreed that the purchase consideration will be paid by issuing 11% Debentures of ₹ 100 each at 10% discount. The number of debentures issued will be

Electronics Ltd. issued 10,000, 6% Debentures of ₹ 100 each at a premium of ₹ 10. It will credit 6% Debentures Account by ______.

Misha Ltd. issued 6,000, 8% Debentures of ₹ 100 each at ₹ 96 per debenture. 8% Debentures Account will be credited by ______.

Which of the following is Correct with respect to debentures?

William Pens Ltd. issued 10,000, 7% Debentures of ₹ 100 each at a discount of ₹ 4. It has a balance in Securities Premium of ₹ 25,000. It will write off Discount on Issue of Debentures as ______.

Which of the following statement is Correct?

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?

The debentures which do not carry a specific rate of interest are called ______.

Ayush Ltd. issued 50,000, 8% Debentures of ₹ 100 each at par redeemable at a premium. Loss on Issue of Debentures was written off ₹ 5,00,000 from Securities Premium and Statement of Profit & Loss each. At what rate, these debentures will be redeemed?

Hari Aggarbatti Ltd. issued 50,000, 8% Debentures of ₹ 100 each at a discount of 5% and redeemable at a premium. Loss on Issue of Debentures was written off ₹ 5,00,000 from Securities Premium and Statement of Profit & Loss. What is the premium payable per debenture on redemption?

Aarav Ltd. issued 10,000, 9% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%. Loss on issue of debentures account will be debited by ______.

Maira Ltd. took over assets of ₹ 12,00,000 and liabilities of ₹ 4,00,000 of Subav Ltd. for an agreed purchase consideration of ₹ 9,00,000. The amount was payable by issue of 11% Debentures of ₹ 100 each at 10% discount. The number of debentures issued will be

Rohit Limited issued 2,000, 9% Debentures of ₹ 100 each at ₹ 95 per debenture. 9% Debentures Account will be credited by ______.

Which of the following statements is incorrect?

Elite Ltd. issued 20,000, 9% Debentures of ₹ 100 each at a discount of 10%, redeemable at a premium. On issue of these debentures, 'Loss on Issue of debentures account' was debited with ₹ 4,00,000. The premium on redemption of debentures is ______.

Net Assets minus Capital Reserve is ______.

The following journal entry appears in the books of Latvion Ltd.:

The discount on issue of debentures is ______.

Nargis Ltd. purchased assets of ₹ 8,00,000 and took over liabilities of ₹ 2,00,000 from Gauri Ltd. The payment was made by issue of 8% Debentures of ₹ 100 each at a premium of 20%. Number of debentures issued will be ______.

Moon Ltd. issued 40,000, 10% debentures of ₹ 100 each at a certain rate of discount and were to be redeemed at a 20% premium. Exiting balance of securities premium before issuing of these debentures was ₹ 12,00,000 and after writing off loss on issue of debentures, the balance in securities premium was ₹ 2,00,000. At what rate of discount were these debentures issued?

On 1st April, 2023, Saya Ltd. issued 7,000, 9% Debentures of ₹ 100 each at a premium of 10%. The total amount of interest on debentures for the year ending 31st March, 2024 will be ______.

Shivalik Ltd. issued 7% Debentures of ₹ 100 each at a discount of 5% on 1st April, 2023. Discount on issue of debentures, ₹ 1,00,000 was completely written off through Statement of Profit and Loss on 31st March, 2024. On issue of debentures, 'Debentures Account'was credited with

Precious Ltd. issued 40,000, 10% Debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%. 'Loss on Issue of Debentures Account' will be debited in the books of Precious Ltd. by ______.

Shyamla Ltd. purchased machinery of ₹ 9,50,000 from Rohini Ltd. The payment was made by issue of 9% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 10% after four years. The number of debentures issued in favour of Rohini Ltd. will be

Assertion (A): Debenture Certificate evidences that the company has borrowed amount from the Debentureholder.

Reason (R): Debenture is the written acknowledgement by a company of debt.

In the context of above two statements, which of the below options is correct?

Assertion (A): Debentures cannot be issued at discount whereas shares can be issued at discount.

Reason (R): The Companies Act, 2013 does not allow issue of shares at discount unless they are issued as ESOPS.

In the context of above two statements, which of the below options is correct?

Assertion (A): Application Money on debentures issued may be collected in lumpsum or in instalments as is decided by the company.

Reason (R): Application Money received in lumpsum is credited to Debentures Application and Allotment Account whereas application money received when issue price of debentures is received in instalments is credited to Debentures Application Account.

In the context of above two statements, which of the below options is correct?

Assertion (A): Irredeemable debentures are also known as perpetual debentures.

Reason (R): The company does not give any undertaking for the repayment of money borrowed by issuing such debentures. They are repayable on the winding-up of the company or on the expiry of a long period.

In the context of above two statements, which of the below options is correct?

Assertion (A): A company has issued 1,00,000, 8% Debentures of ₹ 200 each to a bank as collateral security. It may or may not record it in the books of account by passing a Journal entry.

Reason (R): Journal entry if passed by the company will be:

In the context of above two statements, which of the below options is correct?

Assertion (A): Discount or Loss on Issue of Debentures is written off in the year debentures are allotted.

Reason (R): Discount or Loss on Issue of Debentures is written off in the year debentures are allotted from Securities Premium (if it exists) and/or from Statement of Profit & Loss as finance cost.

In the context of above two statements, which of the below options is correct?

Assertion (A): Interest on Debentures is payable to Debenture holder by the company whether the company earns profit or incurs loss.

Reason (R): Interest on Debentures is an expense, i.e., charge against profit to be paid irrespective of the fact that the company has incurred loss.

In the context of above two statements, which of the below options is correct?

Assertion (A): Sanjay Ltd. issued 1,000, 9% Debentures of ₹ 1,000 each at a premium of 25% Debentures Account will be credited by ₹ 12,50,000.

Reason (R): Debentures Account is credited by the amount received for the debentures issued. Hence, Debentures Account will be credited by ₹ 10,00,000.

In the context of above two statements, which of the below options is correct?

Assertion (A): Interest on bearer debentures is paid to a person who produces the interest coupon attached to such debentures.

Reason (R): Bearer debentures are transferred by way of delivery and the company does not keep any record of these debenture holders.

Choose the correct option from the following: 

Assertion (A): Interest is paid by the company on Debentures issued as Collateral Security.

Reason (R): Interest is paid by the company on Debentures, including debentures issued as collateral security.

In the context of above two statements, which of the below options is correct?

Assertion (A): Pilot Pens Ltd. issued 10,000, 7% Debentures of ₹ 100 each at par redeemable at a premium of ₹ 6 after 5 years. It has balance in Securities Premium of ₹ 20,000 and ₹ 10,000 in Capital Reserve Account. It will write off balance Loss on Issue of Debentures of ₹ 40,000 from Surplus, i.e., Balance in Statement of Profit & Loss.

Reason (R): Balance Loss on Issue of Debentures, i.e., ₹ 40,000 will be written off from Statement of Profit & Loss.

In the context of above two statements, which of the below options is correct?

Amrit Ltd. had outstanding 10,000, 7% Debentures of ₹ 100 each as on 31st March, 2025. Out of these, 1,000 debentures are due for redemption on 31st October, 2025. ₹ 1,00,000 will be shown in the Balance Sheet as at 31st March, 2025 as

Star Ltd. purchased business of Hira Ltd. for ₹ 8,40,000 to be paid by issue of 9% Debentures of ₹ 100 each at a premium of 20%. Number of Debentures that will be issued are ______.

Jio Ltd. purchased business of Disney-Hotstar Ltd. for ₹ 58,40,000 to be paid by issue of cheque for ₹ 50,00,000 and balance by issue of 9% Debentures of ₹ 100 each at a premium of 20%. Debentures were issued on 1st September, 2025. Interest payable for the year ended 31st March, 2026 will be

Xylo Ltd. issued 9,000, 7% Debentures of ₹ 100 each at a certain rate of discount. After writing off Discount on Issue of Debentures, the company was left with a balance of ₹ 35,000 in its Securities Premium Account out of the opening balance of ₹ 71,000. Rate of discount at which the company issued these debentures was

Subha Ltd. issued 20,000, 9% Debentures of ₹ 100 each at a premium to be redeemed at 10% premium. Loss on Issue of Debentures was written offfrom Statement of Profit & Loss debiting it by ₹ 80,000. Premium at which debentures were issued is

Zeba Limited issued 15,000, 9% debentures of ₹ 100 each at 10% discount on 1^st April, 2023. It has a balance of ₹ 1,00,000 in Securities Premium Account. The ‘Discount on issue of Debentures’ of ₹ 1,50,000 will be written off:

On 1st October, 2025, ABC Ltd. issued 2,00,000, 8% Debentures of ₹ 100 each at 10% Discount to be redeemed at 5% Premium at the end of 4 years. Balance in Securities Premium Account is ₹ 10,00,000 and Capital Reserve is 5,00,000. Profit for the year ended 31st March, 2026 before Finance Cost is ₹ 15,00,000. Net Profit or Net Loss for the year is ______.

Sky Ltd. took loan of ₹ 4,00,000 from Next Bank for which the company placed 10% Debentures of ₹ 4,50,000 as collateral security with the bank. It also purchased a machine for ₹ 2,70,000 and paid the vendors issuing 3,000, 8% Debentures of ₹ 100 each. What will be total amount of Long-term borrowings in the company's Balance Sheet?

Mars Ltd. issued 30,000, 10% Debentures of ₹ 100 each at par on 1st April, 2020. The terms of redemption were: On 31st March, 2023 - 10,000 debentures, on 31st March, 2024 - 8,000 on 31st March, 2025 - 6,000 and on 31st March, 2026 - balance debentures.

What will be the amount of interest on debentures for the financial year 2024-25?

Fill-in-the-blanks in the following case:

Fill-in-the-blanks in the following case:

Complete the following Journal Entires:

From the given hypothetical situation, answer the following questions (A), (B) and (C):

1. Loss on Issue of Debentures is to be written off as ______ out of Securities Premium and ______ out of Statement of Profit & Loss.
   1. ₹ 4,50,000; ₹ 4,50,000
   2. ₹ 6,00,000; ₹ 3,00,000
   3. ₹ 8,00,000; ₹ 1,00,000
   4. ₹ 4,00,000; ₹ 5,00,000
2. After writing off Loss on Issue of Debentures, ______ balance in Statement of Profit & Loss will be ______.
   1. Debit; ₹ 6,00,000.
   2. Credit; ₹ 6,00,000.
   3. Debit; ₹ 4,00,000.
   4. Credit; ₹ 4,00,000.
3. Premium on Redemption of Debentures account will have a balance of ______ to be treated as ______ in the first year.
   1. ₹ 9,00,000; Non-Current Liabilities
   2. ₹ 9,00,000; Current Liabilities
   3. ₹ 6,00,000; Non-Current Liabilities
   4. ₹ 6,00,000; Current Liabilities

Based on the above information, you are required to answer the following questions:

1. The company has issued 35,000, 10% Debentures as Collateral Security to securitise Bank Loan for which entry has not been passed in the books of accounts. Whether Vifa Plus Ltd. is required to disclose it in the financial statements?
   1. Yes, in the Notes to Accounts.
   2. No, disclosure is not required since entry has not been passed in the books.
   3. Depends upon the management of the company.
   4. Debentures should be disclosed under Long-term Borrowings.
2. The purchase consideration payable to Cotton Plus Ltd. is
   1. ₹ 46,20,000.
   2. ₹ 46,50,000.
   3. ₹ 47,25,000.
   4. ₹ 37,80,000.
3. The number of 9% Debentures issued to Cotton Plus Ltd. is
   1. 25,000.
   2. 25,200.
   3. 24,200.
   4. 25,500.
4. On purchase of business of Cotton Plus Ltd., there will be a balance of ______ in the books of Vifa Plus Ltd.
   1. ₹ 1,05,000 in Goodwill Account
   2. ₹ 1,05,000 in Capital Reserve Account
   3. ₹ 75,000 in Goodwill Account
   4. ₹ 75,000 in Capital Reserve Account
5. The entry passed for writing off Loss on Issue of Debentures for the year ended 31st March, 2026 would bе:
   1. Statement of Profit & Loss   ...Dr.         ₹ 12,60,000
           To Loss on Issue of Debentures A/c             ₹ 12,60,000
   2. Statement of Profit & Loss   ...Dr.         ₹ 25,20,000
           To Loss on Issue of Debentures A/c             ₹ 25,20,000
   3. Securities Premium A/c   ...Dr.         ₹ 13,60,000
      Statement of Profit & Loss (Finance Cost)   ...Dr     ₹ 11,60,000
           To Loss on Issue of Debentures A/c             ₹ 25,20,000
   4. Securities Premium A/c   ...Dr.         ₹ 12,60,000
      Statement of Profit & Loss (Finance Cost)   ...Dr     ₹ 12,60,000
           To Loss on Issue of Debentures A/c             ₹ 25,20,000
6. The Finance Costs transferred to Statement of Profit & Loss of the company for the year ended 31st March, 2026 would be
   1. ₹ 18,92,000.
   2. ₹ 18,50,000.
   3. ₹ 17,60,800.
   4. ₹ 17,50,800.

Based on the above information, you are required to answer the following questions:

1. The entry passed in the books of Axiom Ltd. on allotment of 9% Debentures to raise funds is:
   
   1. Debentures Application and Allotment A/c   ...Dr.      ₹ 55,00,000
           To 9% Debentures A/c                                           ₹ 50,00,000
           To Securities Premium A/с                                    ₹ 5,00,000
   2. Debentures Application and Allotment A/c   ...Dr.     ₹90,00,000
      Loss on Issue of Debentures A/c   ...Dr.       ₹ 7,50,000
           To 9% Debentures A/c                                ₹ 50,00,000
           To Securities Premium A/с                         ₹ 5,00,000
           To Premium on Redemption of Debentures A/c   ₹ 7,50,000
           To Bank A/c                                                 ₹ 35,00,000
   3. Debentures Application and Allotment A/c   ...Dr.       ₹ 99,00,000     
           To 9% Debentures A/c                                   ₹ 50,00,000
           To Securities Premium A/c                           ₹ 5,00,000
           To Bank A/c                                                  ₹ 44,00,000
   4. Debentures Application and Allotment A/c...Dr.
      Loss on Issue of Debentures A/c   ...Dr.
           To 9% Debentures A/c                            ₹ 50,00,000
           To Securities Premium A/c                     ₹ 5,00,000
           To Premium on Redemption of Debentures A/c         ₹ 7,50,000
           To Bank A/c                                           ₹ 44,00,000
2. On purchase of business of Swaras Ltd., there will be
   1. ₹ 2,00,000 in Goodwill Account.
   2. ₹ 1,00,000 in Goodwill Account.
   3. ₹ 2,00,000 in Capital Reserve Account.
   4. No balance in Goodwill Account and Capital Reserve Account.
3. The consideration to Swaras Ltd. would be settled by issuing
   1. 21,250; 10% Debentures of ₹ 100 each at 20% Premium and ₹ 8,50,000 by cheque.
   2. 20,000; 10% Debentures of ₹ 100 each at 20% Premium and ₹ 8,00,000 by cheque.
   3. 22,000; 10% Debentures of ₹ 100 each at 20% Premium and ₹ 7,60,000 by cheque.
   4. 20,250; 10% Debentures of ₹ 100 each at 20% Premium and ₹ 7,70,000 by cheque.
4. The entry passed for settlement of Purchase Consideration to Swaras Ltd. would be:
   1. Swaras Ltd.   ...Dr.             ₹ 32,00,000
      Loss on Issue of Debentures A/c   ...Dr.           ₹ 4,00,000
           To 10% Debentures A/c                                  ₹ 20,00,000
           To Securities Premium A/c                            ₹ 4,00,000
           To Premium on Redemption of Debentures A/c        ₹ 4,00,000
           To Bank A/c                                                  ₹ 8,00,000
   2. Swaras Ltd.   ...Dr.                     ₹ 24,00,000
      Loss on Issue of Debentures A/c   ...Dr.            ₹ 4,00,000
           To 10% Debentures A/c                                   ₹ 20,00,000
           To Securities Premium A/c                              ₹ 4,00,000
           To Premium on Redemption of Debentures A/c           ₹ 4,00,000 
   3. Swaras Ltd.   ...Dr.                       ₹ 32,00,000
           To 10% Debentures A/c                ₹ 20,00,000
           To Securities Premium A/c           ₹ 4,00,000
           To Bank A/c                                  ₹ 8,00,000
   4. Swaras Ltd.   ...Dr.                        ₹ 24,00,000
           To 10% Debentures A/c                 ₹ 20,00,000
           To Securities Premium A/c            ₹ 4,00,000
5. Loss on Issue of Debentures Account is written off by debiting
   1. Securities Premium Account by ₹ 5,00,000 and Statement of Profit & Loss by ₹ 6,50,000.
   2. Securities Premium Account by ₹ 9,00,000; Capital Reserve Account by ₹ 2,00,000 and Statement of Profit & Loss by ₹ 50,000.
   3. Capital Reserve Account by ₹ 2,00,000 and Statement of Profit & Loss by ₹ 9,50,000.
   4. Securities Premium Account by ₹ 9,00,000 and Statement of Profit & Loss by ₹ 2,50,000.
6. Finance Costs as per Statement of Profit & Loss of the company for the year ended 31st March, 2026 would bе
   1. ₹ 10,50,000.
   2. ₹ 11,50,000.
   3. ₹ 8,50,000.
   4. ₹ 9,50,000.

Zoltas Ltd. issued 40,000; 9% Debentures of ₹ 100 each at par for cash payable along with the application. Applications were received for 60,000 debentures. Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.

Parley Ltd. issued 2,000; 9% Debentures of ₹ 100 each payable as follows:

₹ 25 on application; ₹ 25 on allotment and ₹ 50 on first and final call.

Applications were received for all the debentures along with the application money and allotment was made. Call money was also received on the due date. Pass necessary Journal entries in the books of the company.

Sangam Ltd. issued 20,000; 9% Debentures of ₹ 100 each on the following terms:

₹ 20 on application; ₹ 20 on allotment; ₹ 30 on first call; ₹ 30 on second and final call.

Applications were received for 24,000 debentures. Applications for 18,000 debentures were accepted in full. Applications for 4,000 debentures were allotted 2,000 debentures and applications for 2,000 debentures were refused allotment.

Pass necessary Journal entries.

Super Seals Ltd. issued 10,000, 8% Debentures of ₹ 100 each at par for subscription payable ₹ 40 on application, ₹ 30 on allotment and balance as first and final call. Debentures issued were applied and allotment was made. First and Final Call is yet to be made.

You are required to pass the necessary Journal entries.

Narain Laxmi Ltd. invited applications for issuing 7,500; 12% Debentures of ₹ 100 each at a premium of ₹ 35 per debenture. The issue price was payable on application. Issue was subscribed and allotment was made.

Pass necessary Journal entries for the above transactions in the books of Narain Laxmi Ltd.

Nipa Limited issued 10,000 Debentures of ₹ 100 each at a premium of 10%, payable 30% of nominal (facе) value on application (including premium) and the balance on allotment. The debentures were applied for and the amount was duly received.

You are required to give Journal entries and prepare Cash Book.

GT Ltd. issued 5,000; 8% Debentures of ₹ 100 each at a premium of 5% payable as follows:

₹ 10 on application; ₹ 20 plus premium on allotment and balance on first and final call.

Pass necessary Journal entries.

Ridyum Limited issued 5,000, 9% debentures of ₹ 500 each at a premium of 10%. The amount was payable as follows:

On Application - ₹ 200 per debenture

On Allotment - Balance (including premium)

The debentures were fully subscribed and all amounts were duly received. Pass the necessary journal entries for issue of debentures in the books of Ridyum Limited.

Nikki Ltd. issued 10,000, 7% Debentures of ₹ 100 each at premium of ₹ 20 per debenture. Issue price was payable as follows: ₹ 40 on application, ₹ 50 (including premium) on allotment and balance on first and final call. It received ₹ 4,00,000 as application money. On allotment due amount was received. First and final call is yet to be made.

You are required to pass the necessary Journal entries.

Raja Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows:

1. ₹ 40, including premium of ₹ 10 on application;
2. ₹ 45, including premium of ₹ 15 on allotment; and
3. Balance as first and final call.

The issue was subscribed and allotment made. Calls were made and due amount was received.

Pass Journal entries.

Kamya Ltd. issued 30,000, 8% Debentures of ₹ 100 each at 10% premium for subscription. The issue price was payable ₹ 40 on application, ₹ 40 (including premium) on allotment and balance on first and final call. It received application money amounting to ₹ 10,80,000. Allotment was made and allotment money was received. First and final call is yet to be made.

You are required to pass the necessary Journal entries.

Varsha Ltd. invited applications for issuing 2,000, 12% Debentures of ₹ 100 each at a premium of ₹ 30 per debenture. Full amount was payable on application. Applications were received for 5,000 debentures. Applications for 3,000 debentures were rejected and application money was refunded. Debentures were allotted to the remaining applicants.

Pass necessary Journal entries for the above transactions in the books of Varsha Ltd.

Kati Ltd. issued 8,000, 9% Debentures of ₹ 100 each at a discount of 10%. The full amount was payable on application. Applications were received for 9,000 debentures and allotment was made on pro rata basis.

Pass the necessary Journal entries for the above transactions in the books of Kati Ltd.

Linux Ltd. issued 12,000; 8% Debentures of ₹ 100 each at a discount of 5% payable as 25% on application; 20% on allotment and balance after three months.

Pass Journal entries.

Alka Ltd. issued 5,000, 10% Debentures of ₹ 1,000 each at a discount of 10% redeemable after 5 years. According to the terms of issue, ₹ 500 (after discount of ₹ 50) was payable on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures.

The Decor Ltd. issued 20,000, 6% Debentures of ₹ 100 each at 10% discount payable ₹ 30 on application, ₹ 40 (after discount) and balance as first and final call. Debentures were subscribed and allotment was made. Amount due on allotment was made and received. First and final call is yet to be made.

You are required to pass the necessary Journal entries.

On 1^st October, 2022, Ninza Ltd. issued 4,000, 8% Debentures of ₹ 100 each at a discount of 10%. The company had a balance of ₹ 50,000 in the Securities Premium Account on the same date.

Pass necessary journal entries for issue of debentures and to write off a discount on issue of debentures.

Vedanta Ltd. bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the nominal (face) value of ₹ 100 each at a discount of 10%.

Give Journal entries.

Amrit Ltd. issued 1,000, 6% Debentures of ₹ 100 each to Amit and Bhaskar (Promoters) each for their services in incorporating the company.

Pass Journal entry.

Kinetic Ltd. issued 9% Debentures of ₹ 100 each at a premium of 20% to Vendors for purchase of plant costing ₹ 6,00,000. Pass the necessary Journal entry for the payment made to vendors.

Ananya Ltd. purchased an established business for ₹ 2,00,000 payable ₹ 65,000 by cheque and the balance by issuing 9% Debentures of ₹ 100 each at a discount of 10%.

Give Journal entries in the books of Ananya Ltd.

Paragon Ltd. acquired assets of ₹ 20 lakh and took over creditors of ₹ 2 lakh from Kapil Enterprises. Paragon Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.

Record necessary Journal entries in the books of Paragon Ltd.

Gundola Ltd. took over assets of ₹ 9,00,000 and liabilities of ₹ 3,00,000 from AK Ltd. for an agreed purchase consideration of ₹ 14,00,000. The payment was made through a bank draft of ₹ 5,00,000 and the remaining by issue of 8% Debentures at a discount of 10%.

Record necessary Journal entries in the books of Gundola Ltd. for the above transactions.

Exe Ltd. purchased the assets of the book value  ₹4,00,000 and took over the liabilities of ₹ 50,000 from Mohan Bros.It was agreed that the  purchase consideration ,settled at  ₹3,80,000 be paid by issuing debentures  of ₹ 100 each.
Pass journal entries if debenture are issued: 
(a) at par
(b) at a discount of 10% and
(c) at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash.

Raja Ltd. took over following assets and liabilities of Krishna Ltd. on 1st April, 2026:

The purchase consideration of ₹ 60,00,000 was paid by issuing 9% Debentures of ₹ 100 each at a premium of 20%.

Pass the necessary Journal entries for the above in the books of Raja Ltd.

Astha Ltd. took over assets of ₹ 20,00,000 and took over liabilities of  ₹ 1,00,000 of Nabha Ltd. for a purchase consideration of ₹ 18,00,000. Astha Ltd. paid half of the amount of purchase consideration through a bank draft and the balance amount was settled by issuing 12% Debentures of ₹ 100 each at a discount of 10% in favour of Nabha Ltd.

Pass necessary Journal entries for the above transactions in the books of Astha Ltd.

Green Ltd. purchased the assets of Strong Ltd. for ₹ 40,00,000 and took over liabilities of ₹ 7,00,000 for ₹ 32,40,000. Payment was made by issuing 10% Debentures of ₹ 100 each at a discount of 10%. Pass the necessary Journal entries in the books of Green Ltd.

Apoorv Ltd. acquired building worth ₹ 15,50,000, Machinery worth ₹ 11,40,000 and Furniture worth ₹ 1,10,000 from Dhruv Ltd. and took over its liabilities of ₹ 2,00,000 for a purchase consideration of ₹ 25,00,000. Apoorv Ltd. paid the purchase consideration by issuing 12% debentures of ₹ 100 each at a premium of 25%.

Pass the necessary journal entries in the books of Apoorv Ltd. for the above transactions.

Neeraj Ltd. took over business of Ajay Enterprises on 1–04–2020. The details of the agreement regarding the assets and liabilities to be taken over are:

It was decided to pay for purchase consideration as ₹ 7, 00,000 through Cheque and balance by issue of 2,00,000, 9% Debentures of ₹ 20 each at a premium of 25%. Journalise.

Grown Ltd. issued 500, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the promoters for their services to incorporate the company. It also issued 100, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the underwriters towards their commission. Pass the Journal entries.

Star Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Moon Ltd. for ₹ 6,00,000. Give necessary Journal entries in the books of Star Ltd. assuming that:

Case (1): The purchase consideration was payable 10% in cash and the balance in 5,400; 12% Debentures of ₹ 100 each.

Case (2): The purchase consideration was payable 10% in cash and the balance in 4,500; 12% Debentures of ₹ 100 each issued at 20% premium. 

Jiva Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Star Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 12% Debentures of ₹ 100 each. Give necessary Journal entries in the books of Jiva Ltd., if:

Case 1. The debentures are issued at par.

Case 2. The debentures are issued at 20% premium.

Case 3. The debentures are issued at 10% discount.

Suhani Ltd. took loan of ₹ 4,00,000 from Bandhan Bank Ltd. and issued 8% Debentures of ₹ 6,00,000 as collateral security.

Explain how will the issue of debentures be accounted in the books of the company.

Best Barcode Ltd. took a loan of  ₹ 5,00,000 from a bank giving  ₹ 6,00,000; 9% Debentures as collateral security. Pass journal entries regarding issue of debentures , if any, and show this loan in the Balance Sheet of the company.

Bhagwati Ltd. took loan of ₹ 3,00,000 from IDBI Bank. The company issued 4,000; 9% Debentures of ₹ 100 each as a collateral security to additionally secure the loan. Show how these transactions will be shown in the Balance Sheet of the company.

S. Singh Limited obtained a loan of ₹ 5,00,000 from State Bank of India @ 10% p.a. interest. The company issued ₹ 7,50,000, 10% Debentures of ₹ 100 each in favour of State Bank of India as Collateral Security. Pass necessary Journal entries for the above transactions:
(i) When company decided not to record the issue of 10% Debentures as Collateral Security.
(ii) When company decided to record the issue of 10% Debentures as Collateral Security.

On 1st April, 2026, Star Ltd. issued ₹ 20,00,000, 9% Debentures of ₹ 100 each at a premium of 10%, redeemable at apremium of 5%.

Pass the necessary Journal entries for issue of debentures in the books of Star Ltd.

'BCG Ltd.' issued ₹ 4,00,000, 9% Debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 10%.

Pass necessary Journal entries for the above transactions in the Books of BCG Ltd.

On 1st April, 2018, Sakshi Ltd. issued 1,000, 11% Debentures of ₹ 100 each at a discount of 6%, redeemable at a premium of 5% after three years.

Pass the necessary Journal entries for the issue of debentures in the books of Sakshi Ltd.

Care Cosmetics Ltd. issued 50,000; 9% Debentures of ₹ 10 each on 1st April, 2026 redeemable at a premium of 10% after 10 years. According to the terms of issue, ₹ 4 is payable on application and balance on allotment of debentures. Record necessary Journal entries regarding issue of debentures.

Pass necessary Journal entry for the issue of 11% Debentures in the books of Arpita Ltd. in the following case:

Issued 2,000, 11% Debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%.

Pass necessary Journal entry for the issue of 11% Debentures in the books of Arpita Ltd. in the following case:

Issued 5,000, 11% Debentures of 100 each at a discount of 10%, redeemable at a premium of 5%.

Pass necessary Journal entries in the books of RR Ltd. for issue of debentures in the following case:

Issued 9,000, 9% Debentures of 100 each at a discount of 10%, redeemable at a premium of 5% after 5 years.

Pass necessary Journal entries in the books of RR Ltd. for issue of debentures in the following case:

Issued 5,000, 11% Debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5% after 5 years.

Pass necessary Journal entries for the issue of debentures for the following transaction:

Kajal Ltd. issued 30,000, 11% Debentures of ₹ 100 each at a discount of 10%, redeemable at a premium of 5%.

Pass necessary Journal entries for the issue of debentures for the following transaction:

Ninja Ltd. issued 32,000, 8% Debentures of ₹ 100 each at a premium of ₹ 20 per debenture, redeemable at a premium of ₹ 10 per debenture.

Pass necessary Journal entries for the issue of debentures for the following transaction:

Him Ltd. issued 40,000, 13% Debentures of ₹ 100 each at par, redeemable at a premium of 10%.

Agam Ltd. issued 40,000; 9% Debentures of ₹ 100 each on 1st April, 2025 at a discount of 10% redeemable at a premium of 10%.

Interest was paid half yearly on 30th September and 31st March, give Journal entries for debenture interest for the half year ended 31st March, 2026.

Pratham Ltd. issued 50,000, 9% Debentures of ₹ 100 each on 1st April, 2025 at 10% discount, redeemable at 10% premium. Interest is payable quarterly on 30th June, 30th September, 31st December and 31st March.

Pass the Journal entries for interest for the period ended 30th June, 2025.

Hindustan Ltd. issued 5,000; 10% Debentures of ₹ 100 each on 1st April, 2025. The issue was fully subscribed. As per the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March.

Pass necessary Journal entries related to the debenture interest for the year ending 31st March, 2026 and transfer of interest on debentures of the year to the Statement of Profit & Loss.

On 1st April, 2025, V.V.L. Ltd. issued 1,000, 9% Debentures of ₹ 100 each at a discount of 6%, redeemable at a premium of 10% after three years. Pass necessary Journal entries for the issue of debentures and debenture interest for the year ended 31st March, 2026, if interest is payable on 30th September and 31st March. The company closes its books on 31st March every year.

[Hint: Amount received as Debentures Application and Allotment A/c = 1,000 × ₹ 94 = ₹ 94,000. Interest on 1,000 Debentures of ₹ 100 each for 6 months = ₹ 1,00,000 × 9/100 x 6/12 = ₹ 4,500.]

Pawan Hans Ltd. issued on 1st July, 2025, 10,000, 7% Debentures of ₹ 100 each for subscription at 10% premium payable ₹ 40 on application and balance on allotment. The debentures were subscribed and due amounts were received. Interest was payable on 31st March each year.

Pass the Journal entry for issue of debentures and interest for the year ended 31st March, 2026 and transfer the interest to Statement of Profit & Loss.

Finolex Ltd. issued on 1st July, 2025, 20,000, 7% Debentures of ₹ 100 each for subscription at 10% premium payable ₹ 40 on application; ₹ 40 (including premium) on allotment and balance on first and final call. The debentures were subscribed and allotted. The company has not made first and final call during the year ended 31st March, 2026. Interest was payable on 31st March each year.

Pass the Journal entry for issue of debentures and interest for the year ended 31st March, 2026 and transfer the interest to Statement of Profit & Loss.

Raja Ltd. issued ₹ 2,00,000, 10% Debentures at a discount of 5%. The terms of issue provide the repayment at the end of 4 years. Kitply Ltd. has a balance of ₹ 5,00,000 in Securities Premium.

Pass the Journal entries for issue of debentures and writing off the discount.

[Hint: Dr. Securities Premium A/c and Cr. Discount on Issue of Debentures A/c by ₹ 10,000

Mercury Ltd. issued ₹ 10,00,000; 9% Debentures of ₹ 100 each at a discount of 6% on 1st April,2026. These debentures are to be redeemed equally, spread over 5 annual instalments. It had balance in Capital Reserve of ₹ 75,000.

Pass the Journal entries for issue of debentures and writing off the discount.

Gladiators Ltd. issued 10,000; 8% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 5% payable along with application. It had balance of ₹ 70,000 in Securities Premium and ₹ 50,000 in Capital Reserve. The debentures were fully subscribed and amounts were duly received.

Pass the necessary Journal entries for issue of debentures and writing off Loss on Issue of Debentures.

Sujata Ltd. invited applications for issuing 50,000, 9% Debentures of ₹ 100 each at a discount of 10% redeemable at par after 5 years. The debentures were fully subscribed and all money was duly received. The company had a balance of ₹ 3,00,000 in Securities Premium which it decided to use for writing off the discount/loss on issue of debentures. It also decided to write off the remaining discount/loss on issue of debentures in the first year.

Pass the Journal entries for issue of debentures and for writing off discount/loss on issue of debentures.

On 1st January, 2025, Kushal Ltd. issued 6,000, 8% Debentures of nominal (face) value of ₹ 100 each redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years. It has a balance of ₹ 20,000 in Securities Premium.

Pass Journal entries for Issue of Debentures and writing off Loss on Issue of Debentures.

[Hint: Dr. Securities Premium A/c by ₹ 20,000 and Statement of Profit & Loss (Finance Cost) by ₹ 10,000; Cr. Loss on Issue of Debentures A/c by ₹ 30,000.]

Global Ltd. issued 10,000, 8% Debentures of  ₹ 100 each redeemable in four equal instalments by draw of lots from the end of 3 years at a premium of ₹ 9.
Pass the Journal entries for writing off the Loss on Issue of Debentures. Also prepare Loss on issue of Debentures Account.

Garvit Ltd. invited applications for issuing 3,000, 11% Debentures of ₹ 100 each at a discount of 6%. The full amount was payable on application. Applications were received for 3,600 debentures. Applications for 600 debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.

Pass the necessary Journal entries for the above transactions, including writing off the Discount on Issue of Debentures, in the books of Garvit Ltd.

On 1st June, 2025, R Energy Ltd. issued 10,000, 7% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% at the end of five years. All the debentures were subscribed and allotment was made.

Prepare the Balance Sheet (extract) as at 31st March, 2026.

On 1st April, 2025, 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 of ₹ 80,000.

Prepare the Balance Sheet (extract) as at 31st March, 2026.

Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Dhatu Ltd. in the following case:

400, 11% debentures of ₹ 1,000 each are issued at 10% discount and redeemable at par. Balance in Securities Premium Account is ₹ 50,000.

Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Dhatu Ltd. in the following case:

500, 10% Debentures of ₹ 1,000 each are issued at 10% discount and redeemable at a premium of 10%. Balance in Securities Premium Account is ₹ 75,000.

Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Srijan Ltd. in the following case:

900, 6% debentures of ₹ 1,000 each are issued at 5% discount and redeemable at par. Balance in Securities Premium account is ₹ 50,000.

Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Srijan Ltd. in the following case:

700,8% Debentures of ₹ 1,000 each are issued at 10% discount and redeemable at a premium of 10%. Balance in Securities Premium Account is ₹ 1,00,000.

Sony Ltd. acquired running business of Amrit Ltd.having assets of ₹ 10,00,000 and liabilities of ₹ 2,50,000. 9% Debentures of ₹ 100 each were issued for the acquisition of business at a premium of ₹ 20 per debenture. The company issued 10,000, 8% Debentures of ₹ 100 each redeemable at premium of ₹ 20 per debenture after 5 years.

You are required to pass the Journal entries for the above transactions.

Wellness Ltd. has paid-up share capital of ₹ 1,00,00,000 (divided into 5,00,000 Equity Shares of ₹ 20 each) and 10,000, 7% Debentures of ₹ 200 each.

On 1st July, 2025, it further issued 7% Debentures of ₹ 1,65,00,000 at a premium of 10% redeemable at 25% premium to meet the long-term funds requirement. The issue price was payable along with application.

Balance in Securities Premium Account after the issue of debentures is ₹ 25,00,000. Loss for the year ended 31st March, 2026 is ₹ 10,00,000.

You are required to:

1. Pass Journal entries for issue of Debentures.
2. Prepare Loss on Issue of Debentures Account.
3. Pass Journal entries for interest on debentures, if interest is payable on 30th September and 31st March each year.

The debentures which are payable on the expiry of a specified period either in lump-sum or in installments during the life time of the company are known as ______.

Hero Ltd. issued 15,000, 9% Debentures of ₹ 100 each at a premium of 20%. The prefix '9%' is ______.

Debentureholders ______.

Loss on Issue of Debentures is written off in the year ______.

Interest on Debentures is ______.

Match the following:

Codes:

Convertible debentures are ______.

"Interest accrued and due on debentures" is shown ______.

In the event of liquidation of the company, the debentureholders have prior right for ______.

Statement I: The Companies Act, 2013 does not impose any restrictions on Issue of Debentures at a discount.

Statement II: Premium on Issue of Debentures is credited to Securities Premium Account and is shown on the liabilities side of the Balance Sheet under the head 'Reserves and Surplus.

When debentures are issued as collateral security,

Paratigm Ltd. issued ₹ 40,000, 10% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium. On issue of these debentures 'Loss on Issue of Debentures Account' was debited with ₹ 4,00,000. The amount of premium on redemption of debentures was

On 1st May, 2025, Kranti Ltd. issued 6%, 10,000 convertible debentures of ₹ 100 each at a premium of 20%. Interest is payable on 30th September and 31st March every year. Interest Account for the year ended 31st March, 2026 will be debited by

Venus Ltd. issued 2,00,000, 8% Debentures of ₹ 100 each at 10% discount on 1st April, 2025. Interest is payable half-yearly on 30th September and 31st March every year. Interest written off on 31st March, 2026 was

Hero Ltd. purchased building for ₹ 8,10,000. It was agreed that the purchase consideration be paid by issue of 10% Debentures of ₹ 100 each at a discount of 10%. The 10% Debentures Account will be credited with

Mehar Ltd. issued 9% Debentures of ₹ 100 each at a premium of 20% for satisfying the purchase price of machinery of ₹ 4,50,000. 9% Debentures Account will be credited with ______.

Harsh Ltd. issued 1,00,000, 8% Debentures of ₹ 100 each at certain rate of premium and to be redeemed at 10% premium. At the time of writing off Loss on Issue of Debentures, Statement of Profit & Loss was debited with ₹ 4,00,000. At what rate of premium, these debentures were issued?

Excess value of net assets over purchase consideration at the time of purchase of business is credited to ______.

Sunstar Ltd. issued 1,60,000, 10% Debentures of ₹ 100 each at certain rate of discount and were to be redeemed at 20% premium. Balance of Securities Premium before issuing of these debentures was ₹ 50,00,000 and after writing off Loss on Issue of Debentures, the balance in Securities Premium was ₹ 10,00,000. At what rate of discount, these debentures were issued?

Assertion (A): Premium received on issue of debentures is credited to Securities Premium Account.

Reason (R): Premium received is a capital receipt and Companies Act, 2013 prescribes that securities premium is to be credited to Securities Premium Account.

In the context of above two statements, which of the following is correct?

Assertion (A): Debentures can be issued at a discount of any percentage of nominal (face) value.

Reason (R): The Companies Act, 2013, does not restrict issue of debentures on discount.

In the context of above two statements, which of the following is correct?

Prime Ltd. took over the assets of ₹ 6,00,000 and liabilities of ₹ 1,00,000 of Rabi Ltd. for a purchase consideration of ₹ 3,60,000. Prime Ltd. issued 10% debentures of ₹ 100 each at a discount of 10% in full satisfaction of purchase consideration.

Pass the necessary journal entries in the books of Prime Ltd.

Samprag Ltd. purchased business from India Bulls Ltd.for ₹ 6,00,000 payable 10% by a cheque and the balance by the issue of fully paid 10% Debentures of ₹ 100 each at a premium of 20%. The assets and liabilities consisted of the following:

Building - ₹ 3,00,000; Plant and Machinery - ₹ 1,00,000; Stock - ₹ 2,00,000; Sundry Debtors - ₹ 1,00,000; Sundry Creditors - ₹ 80,000.

Pass the necessary Journal entries in the books of Samprag Ltd.

Pass Journal entries relating to issue of debentures in the books of Anand Ltd. in each of following cases, if issue price is payable in lump sum:

1. Issued 30,000, 9% Debentures of ₹ 100 each at a premium of 10%, redeemable at par.
2. Issued 4,000, 9% Debentures of ₹ 100 each at a premium of 15%, redeemable at a premium of 10%.
3. Issued 5,000, 9% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 10%.

You are required to pass Journal entries to record the following issue of debentures and to write off capital loss:

Nilkamal Ltd. issues ₹ 5,00,000, 10% Debentures at a premium of 5% to be redeemed at 10% premium after 10 years.

You are required to pass Journal entries to record the following issue of debentures and to write off capital loss:

Shaktiman Ltd. issues 3,000, 9% Debentures of ₹ 100 each at a discount of 7%, to be redeemed at a premium of 10% after 4 years.

On 1st April, 2025, Petromax Ltd. had issued ₹ 3,00,000, 9% Debentures at a discount of 6% redeemable at a premium of 4%. It has a balance in Securities Premium Account of ₹ 5,000 and a balance of ₹ 10,000 in the Capital Reserve. The debentures are to be redeemed equally over three annual instalments.

Prepare Loss on Issue of Debentures Account.