- Undersubscription means fewer shares are applied for than offered.
- All applicants get a full allotment of the shares they applied for.
- A minimum subscription of 90% is required as per SEBI.
- If not received, the application money must be refunded.
- Separate accounts are used for equity and preference shares.
Definitions [4]
Definition: Share
As per Section 2(84) of the Companies Act 2013, “Share is the share in the capital of a company and includes stock as well.”
What is meant by 'Employees Stock Option Plan'?
Employee Stock Option is a plan where the company's whole-time directors, officers, and employees get an opportunity of purchasing their own company's shares at a predetermined price in the future. The price at which these shares are offered is usually lower than the market price.
Definition: Debenture
- According to section 2(30) of the Companies Act, 2013, " Debenture includes debenture stock, bonds and any other securities of a Company, whether constituting a charge on the assets of the Company or not."
- “A Debenture is a document given by a company as evidence of a debt to the holder, usually arising out of a loan and most commonly secured by a charge." -Topham
- According to Evelyn Thomas, "a debenture is a document under the company's seal which provides for the payment of a principal sum and interest thereon at regular intervals, which is usually secured by a fixed or floating change on the company's property or undertaking and which acknowledges a loan to the company".
Define debenture.
According to Companies Act, sec. 2(12), “Debenture includes stock, bonds and any other securities of a company whether constituting a charge on the company’s assets or not”.
Formulae [1]
Number of Debentures Issued
\[\text{Number of Debentures Issued}=\frac{\text{Purchase Consideration}}{\text{Issue Price of Debenture}}\]
Key Points
Key Points: Share Capital of a Company
- Share Capital is the total money raised by issuing shares, representing ownership in the company.
- Authorised Capital is the maximum amount a company can issue, as stated in its Memorandum of Association.
- Issued Capital is the part of the authorised capital offered to the public for subscription.
- Subscribed Capital is the portion of issued capital that investors agree to take.
- Called-up Capital is the amount demanded by the company, and Paid-up Capital is what shareholders actually pay; the difference is called Calls-in-Arrears.
- Reserve Capital is the part of subscribed capital to be called only during winding up.
- A Prospectus invites the public to buy shares, and the company must receive at least 90% subscription before allotting shares.
Difference Between Authorised Capital and Issued Capital
| Basis | Authorised Capital | Issued Capital |
|---|---|---|
| Meaning | Maximum capital a company can issue | Part of authorised capital offered to public |
| Disclosure | Stated in the Memorandum of Association | Stated in the Articles of Association |
| Limit | It is equal to or more than the issued capital. | It is equal to or less than the authorised capital. |
Journal Entries: Issue of Shares at Par
A. When the Issue Price is Payable in Lump Sum:
1. On Receiving Application Money:
Bank A/c ...Dr.
To Shares Application A/c / Shares Application and Allotment A/c
(Being the application money received in a lump sum)
Or if a joint account is used:
Bank A/c ...Dr.
To Shares Application and Allotment A/c
(Being the application and allotment money received in a lump sum)
2. On Allotment of Shares (Transfer of Application Money):
Shares Application A/c / Shares Application and Allotment A/c ...Dr.
To Share Capital A/c
(Being the transfer of application money to share capital on allotment)
Or (if joint account used):
Shares Application and Allotment A/c ...Dr.
To Share Capital A/c
(Being the application and allotment money transferred to share capital)
B. When Issue Price is Payable in Instalments:
1. On Receipt of Application Money:
Bank A/c ...Dr.
To Shares Application A/c
(Being the application money received)
2. On Allotment of Shares (Transfer of Application Money):
Shares Application A/c ...Dr.
To Share Capital A/c
(Being application money transferred to share capital on allotment)
3. On Amount Due on Allotment:
Shares Allotment A/c ...Dr.
To Share Capital A/c
(Being allotment money due)
4. On Receipt of Allotment Money:
Bank A/c ...Dr.
To Shares Allotment A/c
(Being the allotment money received)
5. On Amount Due on First Call:
Shares First Call A/c ...Dr.
To Share Capital A/c
(Being the amount due on the first call)
6. On Receipt of First Call Money:
Bank A/c ...Dr.
To Shares First Call A/c
(Being the amount received on the first call)
7. (Optional) On Amount Due on Second Call:
Shares Second Call A/c ...Dr.
To Shares Capital A/c
(Being the amount due on the second call)
8. Bank A/c ...Dr.
To Shares Second Call A/c
(Being the amount received on the second call)
C. Other Related Entries:
1. For Money Refunded on Rejected Application:
Share Application A/c ...Dr.
To Bank A/c
(Being refund of application money on rejected shares)
2. For Adjustment of Excess Application Money towards Allotment:
Share Application A/c ...Dr.
To Share Allotment A/c
(Being excess application money adjusted towards allotment)
3. Combined Entry (Refund + Adjustment):
Share Application A/c ...Dr.
To Share Allotment A/c
To Bank A/c
(Being excess application money adjusted and balance refunded)
Key Points: Under Subscription of Shares
Journal Entries: Over Subscription of Shares
A. Over-Subscription of Shares:
1. When application money is refunded for rejected shares:
Share Application A/c ...Dr.
To Bank A/c
(Being refund of application money for rejected applications)
2. When excess application money is adjusted towards allotment:
Share Application A/c ...Dr.
To Share Allotment A/c
(Being excess application money adjusted against allotment)
3. When excess application money is adjusted towards allotment and calls:
Share Application A/c ...Dr.
To Share Allotment A/c
To Calls-in-Advance A/c
(Being excess application money adjusted towards allotment and calls)
B. Joint Application and Allotment Account
1. On receipt of application money:
Bank A/c ...Dr.
To Share Application and Allotment A/c
(Being application money received)
2. On transfer of application money and allotment due:
Share Application and Allotment A/c ...Dr.
To Share Capital A/c
(Being the transfer of application and allotment money to the share capital)
3. On refund of money for rejected applications:
Share Application and Allotment A/c ...Dr.
To Bank A/c
(Being refund of application money on rejected shares)
4. On receipt of the balance allotment money:
Bank A/c ...Dr.
To Share Application and Allotment A/c
(Being receipt of balance allotment money)
Format: Calculation of Amount Received on Allotment
Calculation of Amount Received on Allotment
| Particulars | ₹ |
|---|---|
| Total Amount Due on Allotment | xxx |
| (Total No. of Shares Allotted × Allotment money per share) | |
| Less: | |
| (i) Excess Application Money adjusted against Allotment Money | xxx |
| (ii) Allotment money not received from Shareholders | xxx |
| Amount Received on Allotment | xxx |
Key Points: Over Subscription of Shares
- Oversubscription means more shares are applied for than offered.
- It can be handled by rejecting extra applications, pro rata allotment, or both.
- In rejection, extra applications are refused, and money is refunded.
- In pro rata, shares are allotted in a fixed ratio and excess money is adjusted or refunded.
- In the combined method, some applications are fully accepted, some partially, and some rejected.
Journal Entries: Forfeiture of Shares
A. Forfeiture of Shares (Issued at Par):
Share Capital A/c ...Dr. [With called-up amount till the stage of forfeiture]
To Forfeited Shares A/c [With the amount received on forfeited shares]
To Calls-in-Arrears A/c [With the amount not received on forfeited shares]
(Being forfeiture of shares for non-payment of call money)
Format: Notes to Accounts of Forfeiture of Shares
Note to Accounts
| Particulars | ₹ |
|---|---|
| Authorised Capital | |
| ... Equity Shares of ₹ 10 each | ... |
| Issued Capital | |
| ... Equity Shares of ₹ 10 each | ... |
| Subscribed Capital | |
| Subscribed and fully paid-up: | |
| ... Equity Shares of ₹ 10 each | ... |
| Subscribed but not fully paid-up: | |
| ... Equity Shares of ₹ 10 each | ... |
| Less: Calls-in-Arrears | ( ... ) |
| Forfeited Shares A/c | ... |
Journal Entries: Pro-rata Allotment
1. Share Application A/c ...Dr.
To Share Allotment A/c
(Being excess application money adjusted with allotment money)
Or
Share Application A/c ...Dr.
To Share Capital A/c
To Share Allotment A/c
(Being excess application money adjusted with share capital and allotment money)
Key Points: Debentures
- Debenture: A written promise by a company to repay a loan with interest.
- Legal View: Includes all debt instruments, as per the Companies Act, 2013.
- Key Features: Fixed interest, secured by assets, issued under seal, max 10-year term (30 for infrastructure).
- Debentureholders: They are lenders, not owners of the company.
- Bond vs Debenture: Bonds may have no fixed interest; debentures always do.
Journal Entries: Issue of Debentures For Consideration Other than Cash
A. Issue of Debentures to Promoters
1. When recording incorporation cost or preliminary expenses:
Incorporation Cost A/c or Preliminary Expenses A/c ...Dr.
To Promoters’ A/c
(Being cost of company incorporation payable to promoters)
2. When debentures are issued to promoters:
Promoters’ A/c ...Dr.
To...% Debentures A/c
(Being debentures issued to promoters)
B. Issue of Debentures to Underwriters
1. When underwriting commission becomes due:
Underwriting Commission A/c ...Dr.
To Underwriter’s A/c
(Being underwriting commission due)
2. When debentures are issued to settle the dues:
Underwriter’s A/c ...Dr.
To ...% Debentures A/c
(Being debentures issued to underwriters)
C. Issue of Debentures to Vendors
1. On Purchase of Business or Assets:
(i) When Purchase Consideration = Net Assets:
Sundry Assets A/c ...Dr.
To Sundry Liabilities A/c
To Vendor’s A/c
(Being assets and liabilities taken over and balance payable to vendor)
(ii) When Purchase Consideration > Net Assets - (Excess debited to Goodwill A/c)
Sundry Assets A/c ...Dr.
Goodwill A/c ...Dr.
To Sundry Liabilities A/c
To Vendor’s A/c
(Being the excess purchase price over net assets treated as goodwill)
(iii) When Purchase Consideration < Net Assets - (Excess credited to Capital Reserve A/c)
Sundry Assets A/c ...Dr.
To Sundry Liabilities A/c
To Capital Reserve A/c
To Vendor’s A/c
(Being purchase consideration less than net assets; balance credited to capital reserve)
2. On Issue of Debentures to Vendors:
(i) When Debentures are issued at Par:
Vendor’s A/c ...Dr.
To ...% Debentures A/c
(Being debentures issued at par to vendor)
(ii) When Debentures are issued at Premium:
Vendor’s A/c ...Dr.
To ...% Debentures A/c
To Securities Premium A/c
(Being debentures issued at premium)
(iii) When Debentures are issued at Discount:
Vendor's A/c ...Dr.
Discount on Issue of Debentures A/c ...Dr.
To ...% Debentures A/c
(Being debentures issued at discount)
Journal Entries: Issue of Debentures as Collateral Security
A. First Method: Entry for Debentures is Not Passed
1. If the loan is taken from a bank :
Bank A/c ...Dr.
To Bank Loan A/c
(Being loan taken from bank)
B. Second Method: Entry for Debentures is Passed
1. On Taking the Loan:
Bank A/c ...Dr.
To Bank Loan A/c
(Being loan taken from bank)
2. On Issuing Debentures as Collateral:
Debentures Suspense A/c ...Dr.
To ...% Debentures A/c
(Being debentures issued as collateral security for a loan)
C. On Repayment of the Loan (for both methods)
1. Reverse of Loan Entry:
Bank Loan A/c ...Dr.
To Bank A/c
(Being repayment of a bank loan)
2. Reverse of Debentures Entry:
... % Debentures A/c ...Dr.
To Debentures Suspense A/c
(Being the cancellation of debentures issued as collateral)
Journal Entries: Interest on Debentures
1. When Interest is Due:
Debentures' Interest or Interest on Debentures A/c ...Dr.
To Debentureholders' A/c
To TDS Payable A/c
(Being interest due on debentures and TDS deducted)
2. On payment to Debentureholders:
Debentureholders' A/c ...Dr.
To Bank A/c
(Being payment of interest to debentureholders)
3. On deposit of TDS in the Government Account:
TDS Payable A/c ...Dr.
To Bank A/c
(Being TDS deposited to the government)
4. On transfer of Interest to Statement of Profit & Loss at the end of the year:
Statement of Profit & Loss (Finance cost) ...Dr.
To Debentures' Interest or Interest on Debentures A/c
(Being interest charged to Profit & Loss Account)
Key Points: Redemption of Debentures
- Redemption of debentures means repaying the amount due to debentureholders.
- Debentures are usually redeemed on the due date, but may be redeemed earlier if permitted.
- Redemption can be done through full payment, in instalments by draw of lots, or by conversion.
- The amount paid on redemption may be the face value or face value plus premium.
- Redemption must follow the terms stated in the prospectus and the debenture certificate.
Important Questions [103]
- Under Which Heads and Sub-heads the Following Items Will Appear in the Balance Sheet of a Company as per Revised Schedule Vi, Part-i of the Companies Act 1956. I. Tax Reserve Ii. Interest on Calls in Advance Iii. Store and Spares
- Under Which Heads and Sub-heads the Following Items Will Appear in the Balance Sheet of a Company as per Revised Schedule Vi, Part-i of the Companies Act 1956. Premium on Redemption of Debentures Loose Tools Balance with Banks
- What Rate of Interest the Does Company Pay on Calls - in Advance If It Has Not Prepared Its Own Articles of Association?
- Give Any One Purpose for Which the Amount Received as ‘Securities Premium’ May Be Utilised.
- When Can a Company Forfeit the Shares Held by a Shareholder?
- State the two main rights that a newly admitted partner acquires in the firm.
- What is Meant by a 'Share
- Distinguish between fixed and fluctuating capital accounts.
- What is Meant by 'Employees Stock Option Plan'?
- Offer of securities or invitation to subscribe securities to a select group of persons by a company (other than by way of public offer) is known as ______.
- Jjk Ltd Invited Application Or Issuing 50,000 Equity Shares of 10 Each at Par. the Amount Was Payable as Follows: Pass Necessary Journal Entries for the Above Transactions in the Books of the Company
- To Provide Employment to the Youth and to Develop the Naxal Affected Backward Areas of Chhattisgarh. X Ltd. Decided to Set-up a Power Plant.
- Jeevan Dhara Ltd. invited applications for issuing 1,20,000 equity shares of Rs 10 each at a premium of Rs 2 per share. The amount was payable as follows: On application Rs 2 per share On allotment
- To Provide Employment to the Youth and to Develop a Backward Area of Jharkhand Which is Near One of the Coal Mines, Thermal Power Energies Ltd. Decided to Set-up a Thermal Power Plant of 500 Mega Watt Capacities. the Company Decided to Issue 10,00,000 Equity Shares of Rs.10 Each at a Premium of 70% to Finance the Project.
- Subham Ltd.' Invited Applications for Issuing 12,000 Equity Shares of Rs 10 Each at a Premium of Rs 3 per Share. the Amount Was Payable as Follows:
- Joy Ltd. Issued 1,00,000 Equity Shares of Rs 10 Each. the Amount Was Payable as Follows: Applications for 95,000 Shares Were Received and Shares Were Allotted to All the Applicants. Sonam to Whom 500 Shares Were Allotted Failed to Pay Allotment Money and Gautam Paid His Entire Amount Due Including the Amount Due on First and Final Call on the 750 Shares Allotted to Him Along with Allotment.
- Z Ltd. invited applications for issuing 10,000, 9% debentures of ₹ 100 each at a premium of ₹ 10 per debenture. The full amount was payable on application.
- ______ means any offer of securities to a select group of persons by a company other than by way of the public offer.
- On 1.4.2015 Ppr Ltd. Issued 1500, 10% Debentures of Rs 100 Each at a Discount of 3%, Redeemable at a Premium of 8% After Three Years. the Company Closes Its Books on 31st March Every Year. Interest
- Give the Meaning of ‘Debenture’?
- Tata Ltd. Issued 5,000, 10% Debentures of Rs 100 Each on 1st April 2012 Pass the Necessary Journal Entries Related to the Debenture Interest for the Half-yearly Ending on 31st March 2013 and Transfer of Interest on Debentures to Statement of Profit and Loss
- Pass the necessary Journal entry when 10,000 debentures of Rs 100 each are issued as collateral security against a Bank loan of Rs 8,00,000
- Give Any One Advantage for the Redemption of Debentures by Purchase in the Open Market?
- On 1st April 2014, Kk Ltd. Invited Applications for Issuing 5,000 10% Debentures of Rs 1,000 Each at a Discount of 6%. Pass the Necessary Journal Entries for Issue and Redemption of Debentures. Ignore Entries Relating to Writing off a Loss on Issue of Debentures and Interest Paid on Debentures.
- Which of the following statement is incorrect with respect to debentures?
- X Ltd. obtained a loan of Rs. 4,00,000 from IDBI Bank. The company issued 5,000, 9% Debentures of Rs. 100 each as collateral security for the same.
- Dn Ltd. Issued 50,000 Shares of Rs 10 Each at a Discount of 10% Payable as Rs 2 per Share on Application Rs 3 on Allotment and Rs 2 Each on First and Final Call. Applications Were Received Fo
- Devi Ltd., on 1st April 2006 Acquired Assets of the Value of Rs 6,00,000 and Liabilities Worth Rs 70,000 from P and Co., at an Agreed Value of Rs 5,50,000. Devi Ltd.
- Pass necessary journal entries for the issue of debentures in the following cases: a. Issued 50,000, 9% debentures of ₹ 100 each at per redeemable at per.
- Pass journal entries relating to issue of debentures for the following transactions: a. Issued 8,000, 10% debentures of ₹ 100 each at a discount of 10%, redeemable at 5% premium.
- Hero Ltd. Purchased Plant and Machinery for ₹ 18,00,000 from Pearl Machines Ltd. Payable ₹ 3,00,000 by Drawing a Promissory Note and the Balance by Issue of 9% Debentures of ₹ 100 Each at a Premium
- Bgp Ltd. Invited Applications for Issuing 15,000, 11% Debentures of ₹ 100 Each at a Premium of ₹ 50 per Debenture. the Full Amount Was Payable on Application. Applications Were Received for 25,000
- Agam Ltd. Issued 40,000 9% Debentures of ₹ 100 Each on April 1, 2018 at a Discount of 10%, Redeemable at a Premium of 10%. Assuming that the Interest Was Paid Half Yearly on September 30 and March 31
- 'Vimal Ltd. purchased assets a worth ₹ 5,00,000 and took over liabilities of ₹ 1,00,000 of Kapil Ltd. for a purchase consideration of ₹ 4,50,000.
- Pass necessary Journal entries for the following transaction in the books of Fortune Ltd: (i) Redeemed Rs 96,000, 12% Debenture by conversion into Equity Shares of Rs 100 each. The
- Pass necessary journal entries for the issue of debentures in the following cases: Issued 5,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5% after 5 years.
- On 1.4.2015, Kvk Ltd. Issued 15,000, 9% Debentures of Rs 100 Each at a Discount of 7%, Redeemable T a Premium of 10% After 10 Years Pass Necessary Journal Entries for the Issue of 9% Debentures and Debenture Interest for the Year Ended 31.3.2016
- On 1.4.2015, Mkm Ltd. Issued 12,000, 11% Debentures of `100 Each at a Discount of 8%, Redeemable at a Premium of 10% After Three Years. the Company Closes Its Books on 31st March Every Year. Interest on 11% Debentures is Payable on 30th September and 31st March Every Year. the Rate of Tax Deducted at Source is 10%
- 'Ananya Ltd' Had an Authorized Capital of Rs 10,00,00,000 Divided into 10,00,000 Equity Shares of Rs 100 Each. Prepare 9% Debenture Account from 1.4.2008 Till All the Debentures Were Redeemed.
- Pass necessary journal entries for the issue of debentures in the following cases : Issued ₹ 7,00,000, 9% debentures of ₹ 100 each at a premium of 20% redeemable at a premium of 10% after 6 years.
- Britannia Ltd. Redeemed 3,000, 12% Debentures Of Rs 100 Each Which Were Issued at a Discount Of Rs 10 per Debenture by Converting Them into Equity Shares Of Rs 100 Each Rs 90 Paid Up.
- Pass necessary journal entries for the issue of debentures in the following cases : Issued ₹ 75,00,000, 9% debentures of ₹100 each at a premium of 10% redeemable at a premium of 5% after 3 years.
- Karan and Varun Were Partners in a Firm Sharing Profits and Losses in the Ratio of 1 : 2. Their Fixed Capitals Were Rs, 2,00,000 and Rs 3,00,000 Respectively.
- On 1-4-2015 V.V.L. Ltd Issued 1000, 9% Debentures of Rs 100 Each at a Discount of 6%, Redeemable at a Premium of 10% After Three Years.
- Bbg Ltd. Invited Applications for Issuing 2,00,000 Equity Shares of Rs 10 Each at a Premium of Rs 10 per Share. the Amount Was Payable as Follows:
- Joy Ltd. Invited Applications for Issuing 20,000 Equity Shares of Rs 10 Each at Par. the Amount Was Payable as Follows:
- From the Following Statement of Profit and Loss of Navratan Ltd. for the Year Ended 31st March, 2013, Prepare a Comparative Statement of Profit and Loss:
- Narain Laxmi Ltd. Invited Applications for Issuing 7500, 12% Debentures of Rs100 Each at a Premium of Rs 35 per Debenture. the Full Amount Was Payable on Application.
- Shakti Ltd. Decided to Redeem Its 750, 12% Debentures of Rs 100 Each. the Company Purchased 500 Debentures at Rs 94 per Debenture from the Open Market.
- X Ltd. redeemable 100, 6% Debentures of Rs 100 each by converting them into Equity Shares of Rs 100 each. The 6% Debentures were redeemable at 10% premium for which the Equity Shar
- Pass the Necessary Journal Entries of the Issues and Redemption of Debentures in the Following Cases: (I) 10,000, 10% Debentures of Rs 120 Each Issued at 5% Premium, Repayable at Par.
- On 1st April, 2008 a Company Made an Issue of Rs 2,00,000, 6% Debentures of Rs 100 Each, Repayable at a Premium of 10%. the Terms of Issue Provided for the Redemption of 400 Debentures Eve
- Chiranjeevi Limited issued 2,000, 10% debentures of ₹ 100 each. Pass the necessary Journal entries for the issue of debentures in the following cases:
- Nav Lakshmi Ltd. Invited application for issuing 3,000, 12% Debentures of Rs 100 each at a premium of Rs 50 per Debentures. The full amount was payable on application.
- Sarvottam Ltd. Decided to redeem its 1250, 12% Debentures of Rs 100 each. It purchased 850 Debentures from the open market at Rs 96 per Debenture.
- PremierAuto Ltd. purchased assets of the value of ₹ 3,60,000 from Anand Ltd. and made the payment of purchase consideration by issuing 11%. Debentures of ₹ 100 each at a discount of 10%.
- Kuber Ltd. purchased assets worth ₹ 10,00,000 and took over liabilities of ₹ 1,00,000 of Amrit Ltd. for a purchase consideration of ₹ 8,00,000.
- Neon Ltd. purchased assets worth ₹ 18,00,000 and took over liabilities of ₹ 2,00,000 of Zenith Ltd. for a purchase consideration of ₹ 15,00,000, Neon Ltd.
- Ktr Ltd., Issued 365, 9% Debentures of `1,000 Each on 4-3-2016. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations
- Taneja Constructions Ltd. Has an Outstanding Balance of Rs 5,00,000, 7% Debentures of Rs 100 Each Redeemable at a Premium of 10%. According to the Terms of Redemption, the Company Redeemed 30% of the Above Debentures by Converting Them into Shares of Rs 50 Each at a Premium of 20%. Record the Entries for the Redemption of Debentures in the Books of Taneja Constructions Ltd.
- Pass the Necessary Journal Entries for an Issue of 1,000, 7% Debentures of `100 Each in the Following Cases: 1) Issued at 5% Premium Redeemable at a Premium of 10%. 2) Issued at a Discount of 5% Redeemable at Par.
- Elite Ltd. issued 20,000, 9% Debentures of ₹ 100 each at a discount of 10%, redeemable at a premium. On issue of these debentures, Loss on Issue of debentures account’ was debited with ₹ 4,00,000.
- Pass the Necessary Journal Entries for the Issue of Debentures in the Following Cases: Rs 30,000, 12% Debentures of Rs 100 Each Issued at a Discount of 5% Redeemable at Par.
- Trk Ltd. Issued 767, 9% Debentures of Rs.100 Each on 1-1-2016. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations
- Vkr Ltd. Issued 975; 9% Debentures of Rs 500 Each on 4-3-2016. Pass Necessary Journal Entries for the Issue of Debentures Under the Following Situations
- On 1.4.2021 Y Ltd. invited applications for issuing 10,000, 9% debentures of ₹ 100 each at a discount of 6%. The entire amount was payable with application.
- On 2.3.2016 L and B Ltd. Issued 635, 9% Debentures of Rs.500 Each. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations
- Sinco Ltd. purchased assets of the book value of ₹ 1,98,000 from Dixon Ltd. It was agreed that the purchase consideration be paid by issuing 10% debentures of 100 each.
- Pass the Necessary Journal Entries for the Issue of Debentures in the Following Cases: Rs 60,000, 12% Debentures of Rs 100 Each Issued at a Discount of 5% Redeemable at Rs 105.
- Give the Meaning of 'Debentures Issued as Collateral Security'.
- Give the meaning of ‘Issue of Debentures as a collateral security.’
- On 1st April, 2014, Kk Ltd. Invited Applications for Issuing 5,000 10% Debentures of Rs 1,000 Each at a Discount of 6%. These Debentures Were Repayable at the End of 3rd Year at a Premium of 10%.
- Bg. Ltd. Issued 2,000, 12% Debentures of Rs.100 Each on 1st April 2012. the Issue Was Fully Subscribed. According to the Terms of Issue, Interest on the Debentures is Payable Half-yearly on 30th September and 31st March and the Tax Deducted at Source is 10%.
- On 1st April, 2014, Kk Ltd. Invited Applications for Issuing 5,000 10% Debentures of Rs 1,000 Each at a Discount of 6%. These Debentures Were Repayable at the End of 3rd Year at a Premium of 10%.
- On 1-4-2015 K.K. Ltd. Issued 500, 9% Debentures of Rs 500 Each at a Discount of 4%, Redeemable at a Premium of 5% After Three Years.
- On 1-4-2015 Pvr Ltd. Issued 750, 11% Debentures of Rs 1,000 Each at a Discount of 5%, Redeemable at a Premium of 10% After Three Years.
- Raj Motors Ltd. Converted Its 400, 12% Debentures of Rs 100 Each Issued at a Discount of 6% into Equity Shares of Rs 10 Each Issued at a Premium of 25%.
- On 1.4.2015, Ggy Ltd. Issued 3000, 9% Debentures of Rs 100 Each at a Discount of 6%, Redeemable at a Premium of 10% After Five Years. the Company Closes Its Books on 31st March Every Year
- Pass Necessary Journal Entries on Dissolution of a Firm in the Following Cases:
- On 1.4.2015, Neena Ltd. Issued 800, 9% Debentures of Rs 100 Each at a Discount of 5%, Redeemable at a Premium of 8% After Five Years.
- Vishesh Ltd. Issued 10,000, 10% Debentures of Rs 100 Each on 1st April, 2012. the Issue Was Fully Subscribed. According to the Terms of Issue, Interest on Debentures is Payable
- Pass Necessary Journal Entries in the Following Cases: Kim India Ltd
- Sonali Ltd. Redeemed 6,000, 12% Debentures of Rs 100 Each Which Were Issued at a Discount of Rs 10 per Debentures by Converting Them into Equity Shares of Rs 100 Each, Rs 90 Paid Up.
- Give the Average Period in Months for Charging Interest on Drawings for the Same Amount Withdraws at the Beginning of Each Quarter.
- On 1-4-2013 Nk Ltd. Had 15,000, 9% Debentures of Rs.100 Each Outstanding.
- On 1-4-2013 Nk Ltd. Had 20,000, 11% Debentures of Rs 100 Each Outstanding.
- The debentures which are payable on the expiry of a specified period either in lump-sum or in installments during the life time of the company are known as ______.
- On 1-4-2013 JN Ltd had 5,000, 10% Debentures of 100 each outstanding. (i) On 1-4-2014 the company purchased in the open market 2000 of its own debentures for 105 each and cancelled the same immediately.
- On 1.4.2013 Roshni Ltd. Had Rs 50,00,000, 9% Debentures of Rs 100 Each Outstanding.
- On 1.4.2013 Jmr Ltd. Had 20,000, 9% Debentures of Rs 100 Each Outstanding (I) on 1.4.2014 the Company Purchased in the Open Market 6,000 of Its Own Debentures for Rs 98 Each and Cancelled the Same Immediately.
- On 1-4-2013 Jn Ltd Had 10,000, 9% Debentures of 100 Each Outstanding. (I) on 1-4-2014 the Company Purchased in the Open Market 2000 of Its Own Debentures for 101 Each and Cancelled the Same Immediately.
- Nardeep, Hardeep and Gagandeep Were Partners in a Firm Sharing Profits in 2:1:3 Ratio. Their Balance Sheet as on 31.3.2015 Was as Follows
- On 1.4.2013 Kaka Ltd. Had Rs 50,00,000, 9% Debentures of Rs 100 Each Outstanding. (I) on 1-4-2014 the Company Purchased in the Open Market 25,000 of Its Own Debentures of Rs 99 Each and Cancell
- On 1st April, 2015, Mayfair Ltd. Issued 4,000 9% Debentures of ₹ 100 Each at a Discount of 5% Redeemable at a Premium of 8%. the Debentures Were Redeemable on 31st March, 2019. the Company Created T
- Madura Ltd. Decided to Redeem Its 10,000, 10% Debentures of ₹100 Each at a Premium of 8%. the Minimum Amount Transferred to Debenture Redemption Reserve Will Be :
- Fill in the Blank. the Portion of Uncalled Capital to Be Called Only in the Event of Winding up of the Company is Called ____________.
- No debenture redemption reserve is required for debentures issued by ______.
- Shahi Ltd. decided to redeem its 8,000, 11% debentures of ₹ 100 each at a premium of 10%. The minimum amount transferred to the debenture redemption reserve will be:
- X Ltd. Had Rs 10,00,00 9% Debentures Due to Be Redeemed Out of Profits on 1st October 2009 at a Premium of 5%. the Company Had a
- Pass the necessary journal entries for the issue and redemption of Debentures in the following cases:(i) 15,000, 9% Debentures of Rs 250 each issued at 5% premium, repayable at 15% premium
- State the Provisions of the Companies Act, 2013 for the Creation of 'Debenture Redemption Reserve'.
- Pass Necessary Journal Entries in the Following Cases : I. Z Ltd Redeemed 1500, 12% Debentures of Rs.100 Each Issued at a Discount of 6% by Converting Them into Equity Shares of Rs.100 Each Issued at a Premium of Rs.25 per Share.
- 'Chennai Fibers Limited' Was Registered with an Authorized Capital of Rs 40,00,000 Divided into 4,00,000 Equity Shares of Rs 10 Each After Comparing the Alternatives, the Company Decided in Favour of the Third Alternative and Issued Debentures on 1.4.2008. Prepare 9% Debentures to Account for the Years 2008-09 to 2013-14
Concepts [23]
- Accounting for Companies - Introduction
- Theory on Shares
- Shareholder's Fund> Share Capital of a Company
- Concept of Shares
- Employee Stock Option Plan (ESOP)
- Private Placement of Shares
- Terms of Issue of Shares> Issue of Shares at Par
- Under Subscription of Shares
- Over Subscription of Shares
- Types of Share Issue
- Forfeiture of Shares
- Pro-rata Allotment
- Concept of Private Placement
- Concept of Debentures
- Terms of Issue of Debentures> Issue of Debentures at Par
- Issue of Debentures for Consideration Other than Cash
- Issue of Debentures with Terms of Redemption
- Issue of Debentures as Collateral Security
- Interest on Debentures
- Redemption of Debentures for Immediate Cancellation - Draw of Lots, Lump Sum and Purchase in the Open Market
- Creation of Debenture Redemption Reserve
- Accounting for Debentures - Conversion Method
- Concept of Redemption of Debentures
