Advertisements
Advertisements
Question
Answer in a sentence only.
What is meant by ‘Issue’ of debentures for consideration other than cash?
Advertisements
Solution
Debentures can be issued for cash or for consideration other than cash. When debentures are issued to the vendors for purchase of assets, it is known as ‘issue of debentures for consideration other than cash’. In other words, vendors are issued debentures for the amount due rather than making payment in cash. Such an issue can be made at a discount, at par or at a premium.
APPEARS IN
RELATED QUESTIONS
Cash proceeds from the issue of debentures is a _______ activity.
Select most appropriate alternative from those given below :
___________debentures of which the amount is repaid written specific period.
Joy Ltd. company bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of ₹ 100 each at a discount of 10%.
Give Journal entries.
Reliance Ltd. purchased machinery costing ₹ 1,35,000 . It was agreed that the purchase consideration be paid by issuing 9% Debentures of ₹ 100 each . Assume debentures have been issued
(i) at par and
(ii)at a discount of 10%.
Give necessary 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 (a): The purchase consideration was payable 10% in cash and the balance in 5,400; 12% Debentures of ₹ 100 each.
Case (b): The purchase consideration was payable 10% in cash and the balance in 4,500; 12% Debentures of ₹ 100 each issued at 20% premium.
R Ltd. purchased the assets of S Ltd. for ₹5,00,000. It also agreed to take over the liabilities of S Ltd. amounted to ₹ 2,00,000 for a purchase consideration of ₹2,80,000 . The payment of S Ltd. was made by issue of 9% Debentures of ₹ 100 each at par.
Pass necessary journal entries in the books of R Ltd.
Which of the following column indicated in the statement given below is to be debited?
"Issue of debentures to a vendor in consideration of the business purchase"
The Journal Entry to acquire an asset from vendor will be:
At the time of issue of debentures, Debentures Account is ______.
Pick the odd one out:
What journal entry will be passed when purchase consideration is equal to net assets while purchasing business from vendor:
Collateral security means ______ security.
Debentures issued as collateral security will be ______ to Debenture Suspense Account.
In case of issue of debentures as collateral security for a loan from the bank, which account will be debited?
PremierAuto Ltd. purchased assets of the value of ₹ 3,60,000 from Anand Ltd. and made the payment of purchase consideration by issuing 11%. Debentures of ₹ 100 each at a discount of 10%. The number of debentures issued by Premier Auto Ltd. were ______.
Kuber Ltd. purchased assets worth ₹ 10,00,000 and took over liabilities of ₹ 1,00,000 of Amrit Ltd. for a purchase consideration of ₹ 8,00,000. Kuber Ltd. paid ₹ 2,60,000 through a cheque and the balance was settled by issuing 12% debentures of ₹ 100 each at a discount of 10%. Pass necessary journal entries in the books of Kuber Ltd. for the above transactions.
Neon Ltd. purchased assets worth ₹ 18,00,000 and took over liabilities of ₹ 2,00,000 of Zenith Ltd. for a purchase consideration of ₹ 15,00,000, Neon Ltd. paid the amount by accepting a bill of exchange of 3,00,000 and the balance was settled by issuing 10% debentures of ₹ 100 each at a premium of 20%. Pass necessary journal entries for the above transactions in the books of Neon Ltd.
