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Question
Which of the following is not a source of cash?
Options
Issue of Debentures
Purchase of Machinery
Sale of Assets
Dividend Received
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Solution
Purchase of Machinery.
Explanation:
The purchase of a machine is an application of cash resources rather than a source of cash.
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Short Answer Question
Name the head under which ‘discount on issue of debentures’ appears in the Balance Sheet of a company.
Newton Ltd. purchased a Machinery from B for ₹ 5,76,000 to be paid by the issue of 9% Debentures of ₹ 100 each at 4% discount. Journalise the trasactions.
On 1st June, 2025, R Energy Ltd. issued 10,000, 7% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% at the end of five years. All the debentures were subscribed and allotment was made.
Prepare the Balance Sheet (extract) as at 31st March, 2026.
Office Products Ltd, issued on 1st April, 2018, 20,000, 9% Debentures of ₹ 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Pass the necessary Journal entries.
Discount on issue of debentures is shown under the following head in the Balance Sheet?
Loss on Issue of Debenture Account is shown:
Debenture holders are ______.
Assertion (A): Sarita Pvt. Ltd. issued 15% 10,000 debentures at par @ ₹ 100 per debenture. The company suffered a loss but still the directors of the company paid interest on debentures.
Reason (R): Interest on debenture is a charge against profits and therefore, its payment is not subject to the earning of profit.
A company can issue debentures:
X Ltd. had outstanding 20,000 12% debentures of Rs. 100 each redeemable on June 30, 2019. Record necessary journal entries at the time of redemption.
