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Question
On 1st April, 2021, Bhim Ltd. issued 2,000, 5% Debentures of ₹ 100 each as follows:
| (a) For cash at a discount of 5% | ₹ 80,000 (Nominal) |
| (b) To a vendor for ₹ 60,000 in satisfaction of his claim | ₹ 70,000 (Nominal) |
| (c) To Bankers for a loan of ₹ 40,000 as collateral security | ₹ 50,000 (Nominal) |
The interest on these debentures was to be paid annually on 31st March, every year, by the company.
You are required to calculate interest on these debentures payable by the company on 31st March, 2022.
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Solution
Value of debentures on which interest is to be calculated = ₹ 80,000 + ₹ 70,000
= ₹ 1,50,000
Interest on debentures = `₹ 1,50,000 xx 5/100`
= ₹ 7,500
Interest on debentures payable by the company on 31st March, 2022 is ₹ 7,500.
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X.Ltd. invites application for the issue of 10,000, 14% debentures of Rs 100 each payable as to Rs 20 on application, Rs 60 on allotment and the balance on call. The company receives applications for 13,500 debentures, out of which applications for 8,000 debentures are allotted in full, 5,000 only 40% and the remaining rejected. The surplus money on partially allotted applications is utilised towards allotment. All the sums due are duly received.
Which of the following statements is incorrect about debentures?
The Balance Sheet of Anjum Ltd. as at 31st March 2022, had outstanding 1,000, 8% Debentures of ₹ 100 each. These debentures were to be redeemed by the company on 31st March 2023. Give the journal entry for the amount due to the Debenture holders on 31st March 2023, including the interest on debentures due to them.
