On 1-4-2013 Jn Ltd Had 10,000, 9% Debentures of 100 Each Outstanding. (I) on 1-4-2014 the Company Purchased in the Open Market 2000 of Its Own Debentures for 101 Each and Cancelled the Same Immediately. - Accountancy

Advertisements
Advertisements

On 1-4-2013 JN Ltd had 10,000, 9% Debentures of 100 each outstanding.

(i) On 1-4-2014 the company purchased in the open market 2000 of its own debentures for 101 each and cancelled the same immediately.

(ii) On 1-4-2015 the company redeemed at par debentures of 4, 00,000 by draw of a lot.

(iii) On 28-2-2016 the remaining debentures were purchased for immediate cancellation for 3, 97,000.

Pass necessary journal entries for the above transactions in the books of the company ignoring debentures redemption reserve and interest on debentures

Advertisements

Solution

In the books of JN Ltd

Journal

Date Particulars L.F. Dr.(Rs.) Cr.(Rs.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Own Debentures A/c                                                                                                                             Dr

             To Bank A/c

(Purchase of 2,000 own debentures @ Rs.101 each)

 

9% Debentures A/c                                                                                                                               Dr

Loss on Cancellation of own Debentures                                                                                                  Dr

              To own Debentures A/c

(Cancellation of own debentures)

 

9% Debentures A/c                                                                                                                               Dr

             To Debenture holders A/c

(9% Debenture due for redemption)

 

Debentures holders A/c                                                                                                                          Dr

              To Bank A/c

(Amount paid to debenture holders)

 

Own Debentures A/c                                                                                                                              Dr

             To Bank A/c

(Purchase of 4,000 own debentures)

 

9% Debentures A/c                                                                                                                                Dr

            To Own Debentures A/c

            To Gain (Profit) on Cancellation

(Own debentures purchased and cancelled)

 

Gain (Profit) on Cancellation A/c                                                                                                              Dr

             To Capital Reserve A/c

(Transfer of Gain (Profit) on redemption of debentures to Capital Reserve)

 

2,02,000

 

 

 

2,00,000

2,000

 

 

 

4,00,000

 

 

 

4,00,000

 

 

 

3,97,000

 

 

 

4,00,000

 

 

 

 

3,000

 

 

 

2,02,000

 

 

 

 

2,02,000

 

 

 

4,00,000

 

 

 

4,00,000

 

 

 

3,97,000

 

 

 

3,97,000

3,000

 

 

 

3,000

 

 

  Is there an error in this question or solution?
2015-2016 (March) Delhi Set 1

RELATED QUESTIONS

On 1-4-2013 NK Ltd. had 15,000, 9% Debentures of Rs.100 each outstanding.

(i) On 1-4-2014 the company purchased from the open market 5,000 of its own debentures for Rs.102 each and cancelled the same immediately.

(ii) On 1-4-2015 company redeemed at par debentures of Rs.3, 00,000 by draw of lot.

(iii) On 17-2-2016 the remaining debentures were purchased for immediate cancellation for Rs.5, 99,500.

Ignoring debenture redemption reserve and interest on debentures pass necessary journal entries for the above transactions in the books of the company.


On 1.4.2013 JJJ Ltd had Rs.1,00,00,000, 10% Debentures of Rs.100 each outstanding.

(i) On 1.4.2014 the company purchased in the open market 30,000 of its own debentures for Rs.99 each and cancelled the same immediately.

(ii) On 28.2.2015 the company redeemed at par debentures of Rs.50, 00,000 by draw of a lot.

(iii) On 31.1.2016 the remaining debentures were purchased for immediate cancellation for Rs.19,99,000.

Ignoring interest on debentures and debenture redemption reserve, pass necessary journal entries for the above transactions in the books of the company.


On 1.4.2013 JMR Ltd. had 20,000, 9% debentures of Rs 100 each outstanding

(i) On 1.4.2014 the company purchased in the open market 6,000 of its own debentures for Rs 98 each and cancelled the same immediately.

(ii) On 28.2.2015 the company redeemed at par debentures of Rs 10, 00,000 by draw of a lot.

(iii) On 1.3.2016 the remaining debentures were purchased for immediate cancellation for Rs 3, 99,000.

Ignoring interest on debentures and debenture redemption reserve, pass necessary journal entries for the above transactions in the books of JMR Ltd.


On 1.4.2013 Roshni Ltd. had Rs 50,00,000, 9% debentures of Rs 100 each outstanding.

(i) On 1.4.2014 the company purchased in the open market 20,000 of its own debentures at Rs 98.50 each and cancelled the same immediately.

(ii) On 1.10.2014 the company redeemed at par debentures of Rs  16,00,000 by draw of a lot.

(iii) On 31.3.2015 the remaining debentures were purchased for immediate cancellation for Rs 9,98,000. Ignoring interest on debentures and debenture redemption reserve.

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


On 1-4-2013 JN Ltd had 5,000, 10% Debentures of 100 each outstanding.

(i) On 1-4-2014 the company purchased in the open market 2000 of its own debentures for 105 each and cancelled the same immediately.

(ii) On 1-4-2015 the company redeemed at par debentures of 1,00,000 by draw of a lot.

(iii) On 28-2-2016 the remaining debentures were purchased for immediate cancellation for 1,97,000


On 1-4-2013 NK Ltd. had 20,000, 11% Debentures of Rs 100 each outstanding.

(i) On 1-4-2014 the company purchased in the open market 4,000 of its own debentures at Rs 102 each and cancelled the same immediately.

(ii) On 1-4.2015 the company redeemed at par debentures of Rs 8, 00,000 by draw of a lot.

(iii) On 28-2-2016 the remaining debentures were purchased for immediate cancellation for Rs 7, 89,900.

Pass necessary journal entries for the above transactions in the books of the company ignoring debenture redemption reserve and interest on debentures.


On 1.4.2013 Kaka Ltd. had Rs 50,00,000, 9% debentures of Rs 100 each outstanding.
(i) On 1-4-2014 the company purchased in the open market 25,000 of its own debentures of Rs 99 each and cancelled the same immediately.
(ii) On 1-4-2015 the company redeemed at par debentures of Rs 10,00,000 by draw of lot.
(iii) On 1-1-2016 the remaining debentures were purchased for Rs 14,99,000 and were cancelled immediately.

Ignoring debenture redemption reserve and interest on debentures pass necessary journal entries for the above transactions in the books of the company.


Orange Ltd. took over assets of ₹ 7,00,000 and liabilities of ₹ 60,000 of Purple Ltd. for a purchase consideration of ₹ 6,30,000 payable by the issue of 10% Debentures of ₹100 each at a premium of 10% and if need be, a part of the purchase consideration in cash. How will the company meet the purchase consideration?


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 ______.


On 1st April, 2022, Lighthouse Ltd. purchased land from Bricks Ltd. The payment was made on the same day by:

  1. Issuing a bank draft for ₹ 2,00,000.
  2. Drawing a Promissory Note in favour of Bricks Ltd. for ₹ 10,00,000.
  3. Issuing 8,000, 10% Debentures of ₹ 100 each at par, redeemable at a premium of 10% after three years.

You are required to pass necessary journal entries in the books of Lighthouse Ltd. on the date of purchase of land.


Share
Notifications



      Forgot password?
Use app×