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X Ltd. Took a Loan of ₹ 3,00,000 from Idbi Bank . the Company Issued 4,000; 9% Debentures of ₹ 100 Each as a Collateral Security for the Same . - Accountancy

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Question

X Ltd. took a loan of  ₹ 3,00,000 from IDBI Bank . The company issued 4,000; 9% Debentures of  ₹ 100 each as a collateral security for the same . Show how these items will be presented in the Balance Sheet of the company. 

Solution

When Debentures Issued as Collateral Security is shown separately 

X Ltd.
Balance Sheet

Particulars

Note No.

Amount 

(Rs)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

2. Non-Current Liabilities

 

 

a. Long-Term Borrowings

1

3,00,000

 

3. Current Liabilities

 

 

Total

 

3,00,000

II. Assets

 

 

1.Non-Current Assets

 

 

2.Current Assets

 

 

a. Cash and Cash Equivalents

2

3,00,000

Total

 

3,00,000

NOTES TO ACCOUNTS

Note No.

Particulars

Amount

(Rs)

1

Long-Term Borrowings

 

 

Secured:

 

 

Loan  From IDBI(Secured by issue of  Debentures of Rs 4,00,000)

3,00,000

 

9 % Debentures (Issued as Collateral Security against loan)

 

4,00,000

 

 

-

 

Less: Debenture Suspense Account

4,00,000

 

 

3,00,000

2

Cash and Cash Equivalents

 

 

Cash at Bank

3,00,000

Alternative Method: When Debentures Issued as Collateral Security are not shown separately

X Ltd
Balance Sheet

Particulars

Note No.

Amount 

(Rs)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

2. Non-Current Liabilities

 

 

a. Long-Term Borrowings

1

3,00,000

3.Current Liabilities

 

 

Total

 

3,00,000

II. Assets

 

 

1. Non-Current Assets

 

 

2. Current Assets

 

 

a. Cash and Cash Equivalents

2

3,00,000

Total

 

3,00,000

NOTES TO ACCOUNTS

Note No.

Particulars

Amount

(Rs)

1

Long-Term Borrowings

 

 

Secured:

 

 

Loan From IDBI (Secured by issue of  9% Debentures of Rs 4,00,000 as Collateral Security)

 

3,00,000

2

Cash and Cash Equivalents

 

 

Cash at Bank 

3,00,000

  Is there an error in this question or solution?
Solution X Ltd. Took a Loan of ₹ 3,00,000 from Idbi Bank . the Company Issued 4,000; 9% Debentures of ₹ 100 Each as a Collateral Security for the Same . Concept: Debentures as Collateral Security-concept.
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