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Question
Raj Ltd . issued 5,000; 8% Debentures of ₹ 100 each at a premium of 5% payable as follows:
₹ 10 on application ; ₹ 20 along with premium on allotment and balance on first and final call.
Pass necessary Journal entries.
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Solution
Books of Raj Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Bank A/c |
Dr. |
|
50,000 |
|
|
|
To 8% Debenture Application A/c |
|
|
50,000 |
|
|
|
(Debenture application money received for 5,000 debentures at Rs 10 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
8% Debenture Application A/c |
Dr. |
|
50,000 |
|
|
|
To 8% Debentures A/c |
|
|
50,000 |
|
|
|
(Debenture application money transferred to 8% Debentures A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
|
8% Debenture Allotment A/c |
Dr. |
|
1,00,000 |
|
|
|
To 8% Debentures A/c |
|
|
75,000 |
|
|
|
To Securities Premium A/c |
|
|
25,000 |
|
|
|
(Debenture allotment due on 5,000 8% Debentures at Rs 20 including premium of Rs 5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
1,00,000 |
|
|
|
To 8% Debentures Allotment A/c |
|
|
1,00,000 |
|
|
|
(Debenture allotment money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
8% Debentures First and Final Call A/c |
Dr. |
|
3,75,000 |
|
|
|
To 8% Debenture A/c |
|
|
3,75,000 |
|
|
|
(Debenture first and final call due on 5,000 Debentures at Rs 75 each) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank A/c |
Dr. |
|
3,75,000 |
|
|
|
To 8% Debenture First and Final Call A/c |
|
|
3,75,000 |
|
|
|
(Debenture first and final call received) |
|
|
|
|
RELATED QUESTIONS
State the meaning of ‘Debentures issued as Collateral Security’.
What is ‘Capital Reserve’?
Journalise the following:
(i) A debenture issued at Rs. 95, repayable at Rs. 100;
(ii) A debenture issued at Rs. 95, repayable at Rs. 105; and
(iii) A debenture issued at Rs. 100, repayable at Rs. 105;
The face value of the debenture in each of the above cases is Rs. 100.
B. Ltd. issued debentures at 94% for Rs 4,00,000 on April 01, 2011 repayable by five equal drawings of Rs 80,000 each. The company prepares its final accounts on March 31 every year.
Indicate the amount of discount to be written-off every accounting year assuming that the company decides to write-off the debentures discount during the life of debentures. (Amount to be written-off: 2012 Rs 8,000; 2013 Rs 6,400; 2014 Rs 4,800; 2015 Rs 2,000; 2016 Rs 1,600).
Vishwas Ltd. issued 2,000; 9% Debentures of ₹ 100 each payable as follows:
₹ 25 on application; ₹ 25 on allotment and ₹ 50 on first and final call.
Applications were received for all the debentures along with the application money did allotment was made . Call money was also received on the due date.
Pass necessary Journal entries in the books of the company.
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.
Vijay Laxmi Ltd. invited applications for 10,000; 12% Debentures of ₹ 100 each at a premium of ₹ 70 per debenture .The full amount was payable on application.
Applications were received for 13,500 debentures. Applications for 3,500 debentures were rejected and application money was refunded . Debentures were allotted to the remaining applications .
The Amrit Ltd was promoted by Amrit and Bhaskar with an authorised capital of ₹ 10,00,000 divide into 1,00,000 shares of ₹ 10 each.
The company decided to issue 1,000 6% Debentures of ₹ 100 each to Amrit and Bhaskar, each for their services in incorporating the company.
Pass 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.
Garvit Ltd. invited applications for issuing 3,000, 11% Debentures of ₹ 100 each at a discount of 6%. The full amount was payable on application. Applications were received for 3,600 debentures. Applications for 600 debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass the necessary Journal entries for the above transactions, including writing off the Discount on Issue of Debentures, in the books of Garvit Ltd.
When debentures are issued at par and are redeemable at a premium, the loss on such an issue is debited to ______.
Which of the following. column indicated in·the statement given below is to be credited?
"Writing off the loss on issue of debentures"
Loss on Issue of Debenture Account is shown:
Pick the odd one out:
Debenture holders are ______.
Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.
Reason (R): Debenture holders have voting rights.
10% Debenture issued at ₹ 105 is repayable at ₹ 110, the face value of the debenture being ₹ 100. Calculate the amount of loss on redemption of debentures.
Which of the following is not a source of cash?
