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Question
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 .
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Solution
In the Books of Vijay Laxmi Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
||
|
|
Bank A/c |
Dr. |
|
22,95,000 |
|
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
22,95,000 |
|
|
|
(Application money received on 13,500 12% debenture) |
|
|
|
||
|
|
|
|
|
|
||
|
|
Debenture Application and Allotment A/c |
Dr. |
|
22,95,000 |
|
|
|
|
To 12% Debentures A/c |
|
|
|
10,00,000 |
|
|
|
To Securities Premium Reserve A/c |
|
|
|
7,00,000 |
|
|
|
To Bank A/c |
|
|
|
5,95,000 |
|
|
|
(10,000; 12% Debentures issued at a premium of Rs 70 and excess money refunded) |
|
|
|
||
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Short Answer Question
State the meaning of ‘Debentures issued as a Collateral Security.
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What Journal entries will be made in the following three cases, if debentures are issued: (a) at par; (b) at discount; (c) at premium of 10%? It was agreed that any fraction of debentures be paid in cash.
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).
A Ltd . issued 2,000; 9% Debentures of ₹ 100 each on the following terms:
₹20 on applications ;₹ 20 on allotment ; ₹ 30 on first call ; ₹ 30 on final call.
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Narain Laxmi Ltd. invited applications for issuing 7,500; 12% Debentures of ₹ 100 each at a premium of ₹ 35 per debenture . The full amount was payable on application. Applications were received for 10,000 Debentures. Allotment was made to all the applications on pro rata.
Pass necessary Journal entries for the above transactions in the books of Narain Laxmi Ltd.
Alok Ltd. issued 7,000, 10% Debentures of ₹ 500 each at a premium of ₹ 50 per debenture redeemable at a premium of 10% after 5 years. According to the terms of issue, ₹ 200 was payable on application and balance on allotment.
Record necessary Journal entries at the time of issue of 10% Debentures.
X Ltd . issued 12,000; 8% Debentures of ₹ 100 each at a discount of 5% payable as 25% on application;20% on allotment and balance after three months.
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Record necessary journal entries in the books of Romi Ltd.
Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
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Record necessary journal entries in the books of Romi 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.
Pass necessary Journal entries relating to the issue of debentures for the following:
(a) Issued ₹ 28,000; 10% Debentures of ₹ 100 each at a premium of 15% redeemable at par.
(b) Issued ₹ 30,000; 10% Debentures of ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
(c) Issued ₹ 80,000; 10% Debentures of ₹ 100 each at par repayable at a premium of 10%.
Pass necessary Journal entries for the issue of Debentures in the following cases:
(a) ₹ 40,000; 15% Debentures of ₹ 100 each issued at a discount of 10% redeemable at par.
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Fill in the blank.
For recording the issue of debentures as collateral security by a journal entry _______ account is debited.
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 ______.
When the debenture of face value of ₹ 100 is issued at ₹ 100 is called, issue off debenture at ______.
Debentures are considered as ______ equity.
Debenture premium cannot be used to ______.
Debenture holders are the ______.
Premium received on issue of debentures may be utilised for:
