Advertisements
Advertisements
Question
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.
Advertisements
Solution
In the books of Raha Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2017 |
|
|
|
||
|
January 01 |
Bank A/c (6,000 × 100) |
Dr. |
6,00,000 |
|
|
|
|
To Debentures Application & Allotment A/c (6,000 × 100) |
|
|
6,00,000 |
|
|
|
(Being application money received on 8% Debentures issued) |
|
|
|
|
|
|
|
|
|
||
|
January 01 |
Debentures Application & Allotment A/c |
Dr. |
6,00,000 |
|
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
30,000 |
|
|
|
|
To 8% Debentures A/c |
|
|
6,00,000 |
|
|
|
To Premium on Redemption of Debentures A/c |
|
|
30,000 |
|
|
|
(Being application & allotment money adjusted along with 5% |
|
|
|
|
|
|
premium payable on redemption) |
|
|
|
|
|
2017 |
|
|
|
||
| December 31 | Securities Premium Reserve A/c |
Dr. |
10,000 |
|
|
| Statement of Profit & Loss A/c |
Dr. |
20,000 |
|
||
|
|
To Loss on Issue of Debentures A/c |
|
|
30,000 |
|
|
|
(Being loss on issue of debentures written off) |
|
|
|
APPEARS IN
RELATED QUESTIONS
What is meant by ‘Issue of debenture at discount and redeemable at premium’?
What is ‘Capital Reserve’?
Wye Ltd . purchased an established business for ₹ 2,00,000 payable as ₹ 65,000 by cheque and the balance by issuing 9% Debentures of ₹ 100 each at a discount of 10%.
Give journal entries in the books of Wye Ltd.
Exe Ltd. purchased the assets of the book value ₹4,00,000 and took over the liabilities of ₹ 50,000 from Mohan Bros.It was agreed that the purchase consideration ,settled at ₹3,80,000 be paid by issuing debentures of ₹ 100 each.
Pass journal entries if debenture are issued:
(a) at par
(b) at a discount of 10% and
(c) at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash.
On 1st April, 2015. Mathew Ltd. issued 10,000, 9% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 5%. These debentures were redeemable as follows:
| On 31st March, 2016 | 2,000 Debentures; |
| On 31st March, 2017 | 5,000 Debentures; |
| On 31st March, 2018 | 3,000 Debentures. |
Prepare the Loss on Issue of Debentures Account, Debentures Account and Premium on Redemption of Debentures Account for three years.
X Co. Ltd. purchased assets worth Rs.28,80,000. It issued debentures of Rs. 100 each at a discount of 4 per cent in full satisfaction of the purchase consideration. The number of debentures issued to vendor is ______.
Excess value of net assets over purchase consideration at the time of purchase of business is credited to ______.
The word 'debenture' has been derived from which Latin word (which means to borrow)?
Which of the following given statement is correct.
Statement 1 - "Debenture is written instrument acknowledging a debt under the common seal of the company"
Statement 2 - Debenture is oral instrument acknowledging a debt under the common seal of the company"
Which of the following. column indicated in·the statement given below is to be credited?
"Writing off the loss on issue of debentures"
Debenture interest is paid as ______.
Pick the odd one out:
Interest on Debentures is a charge against ______.
Which of the following statement is true?
Loss on issue of debentures is treated as ______.
Interest on debentures is calculated on ______.
A company can issue debentures:
XYZ Ltd. Issued 6,000, 12% Debentures of ? 50 each on April 1, 2014. Interest on these debenture is payable annually 3151 March each year. The debentures are redeemable in four equal installments at end of third, fourth, fifth and sixth year. You are required to pan journal entries at the time of issue and redemption of debentures in the books of the company under following cases:
- Debentures are issued at par and redeemable at par.
- Debentures are issued at a premium of 10% and redeemable at par.
- Debentures are issued at a discount of 10% and redeemable at par.
- Debenture are issued at par but redeemable at a premium of 10%.
- Debentures are issued at a premium of 10% and redeemable at premium of 10%.
- Debenture are issued at a discount of 10% and redeemable at a premium of 10%.
