Advertisements
Advertisements
Question
Journalise the following:
(a) A debenture issued at ₹95, repayable at ₹ 100.
(b) A debenture issued at ₹95, repayable at ₹ 105.
(c) A debenture issued at ₹95, repayable at ₹ 105.
The face value of debenture is ₹ 100 in each of the above cases.
Advertisements
Solution
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
(a) |
Bank A/c |
Dr. |
|
95 |
|
|
|
To Debenture Application A/c |
|
|
95 |
|
|
|
(Debenture application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
95 |
|
|
|
Discount on Issue of Debentures A/c |
|
|
5 |
|
|
|
To Debenture A/c |
|
|
100 |
|
|
|
(Debenture of Rs 100 each issued at Rs 95 with the term repayable at par) |
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
Bank A/c |
Dr. |
|
95 |
|
|
|
To Debenture Application A/c |
|
|
95 |
|
|
|
(Debenture application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
95 |
|
|
|
Discount on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
|
To Debentures A/c |
|
|
100 |
|
|
|
To Premium on Redemption A/c |
|
|
5 |
|
|
|
(Debenture of Rs 100 each issued of Rs 95 with the term repayable at Rs 105) |
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
Bank A/c |
Dr. |
|
100 |
|
|
|
To Debenture Application A/c |
|
|
100 |
|
|
|
(Debenture Application received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
100 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
|
To Debentures A/c |
|
|
100 |
|
|
|
To Premium on Redemption A/c |
|
|
5 |
|
|
|
(Debenture of Rs 100 each issued at par with the term repayable at Rs 105) |
|
|
|
|
APPEARS IN
RELATED QUESTIONS
Short Answer Question
What is meant by ‘Issue of debentures for Consideration other than Cash’?
What is meant by ‘Issue of debenture at discount and redeemable at premium’?
Long Answer Question
Describe the meaning of ‘Debenture Issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?
ABC Ltd. issued 40,000; 10% Debentures of ₹ 100 each at par for cash payable in full 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.
Alka Ltd . issued 5,000, 10% Debentures of ₹ 1,000 each at a discount of 10% redeemable at a premium of 5% after 5 years . According to the terms of issue ₹ 500 was payable on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures.
Bright Ltd. issued 5,000; 10% Debentures of ₹ 100 each on 1st April, 2015 . The issue was fully subscribed . According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%.
Pass necessary journal entries related to the debenture interest for the year ending 31st March , 2016 and transfer of interest on debentures of the year to the Statement of Profit and Loss .
Kitply 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 Reserve . The company decided to write off discount on issue of debentures from Securities Premium Reserve in the first year.
Pass the journal entry.
A limited company issued ₹ 1,00,000, 9% Debentures at a discount of 6% on 1st April, 2017. These debentures are to be redeemed equally, spread over 5 annual instalments.
Pass the Journal entries for issue of debentures and writing off the discount.
On 1st January, 2017, Raha 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 ₹ 10,000 in Securities Premium Reserve.
Pass Journal entries. Also give Journal entries for writing off Loss on Issue of Debentures.
On 1st June, 2017, 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, 2018.
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.
Debentures which are transferable by mere delivery are ______.
When debentures are issued at a discount and are redeemable at a premium, which of the following accounts is debited at the time of issue?
Which of the following given statement is correct.
Statement 1 - "Shares cannot be converted into debentures whereas debentures can be converted into shares"
Statement 2 - "Shares can be converted into debentures whereas debentures cannot be converted into shares"
Debenture interest is paid as ______.
Rehana, Shakina and Jasmine are partners. They share When debentures are issued as collateral security, the final entry for recording the transaction in the books is ______.
Loss on issue of debentures is treated as ______.
Which of the following is false with respect to debentures ?
A Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of B Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 15% debentures of ₹ 100 each at 10% discount. The number of debentures to be issued is:
Maximum limit on premium on issue of debentures is ______.
