Commerce (English Medium) Class 12 - CBSE Important Questions

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 Shares were issued at 25% premium. Pass the necessary Journal entries for the redemption of above mentioned debentures in the books of X Ltd.

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.

(ii) 20,000, 9% Debentures of Rs 200 each issued at 20% premium, repayable at 30% premium.

On 1^st 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 every year starting from the end of 31-3-2010 either by purchase from the open market or by draw of lots at the company’s option.

On 31-3-2010, the company purchased for cancellation 300 debentures at 95% and 100 debentures at 90%.

Pass the necessary Journal entries for the issue and redemption of debentures assuming that the company had already created the

Debentures Redemption Reserve A/c by the require amount.

Give the average period in months for charging interest on drawings for the same amount withdraws at the beginning of each quarter. 

Give the meaning of ‘Issue of Debentures as a collateral security.’

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.

Applications were received for 4,000 debentures. Application for 1,000 debentures were rejected and application money was refunded. Debentures were allotted to the remaining applicants.

Pass necessary Journal entries for the above transaction in the books of Nav Lakshmi Ltd 

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. The remaining Debenture were redeemed out of profit. The company has already made a provision for Debenture Redemption Reserve in its books.

Pass necessary Journal entries in the books of the company for the above transaction.

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

Equity Shares were issued at a discount 4%.

(ii) Converted 4,800, 12% Debentures of Rs 100 each into New 13% Debentures of Rs 100 each.

The new Debentures were issued at a premium 25%.

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 for 70,000 shares. It was decided that

(a) Refuse allotment to the applicants of 10,000 shares,

(b) Allot 10,000 shares to Mohan who had applied for a similar number, and

(c) Allot the remaining share on a pro-rata basis.

Mohan failed to pay the allotment money and Sohan who belonged to category (c) and was allotted 3,000 shares, paid both the calls with allotment, Calculate the amount received on allotment.

Devi Ltd., on 1^st April 2006 acquired assets of the value of Rs 6,00,000 and liabilities worth Rs 70,000 from P & Co., at an agreed value of Rs 5,50,000. Devi Ltd. issued 12% Debentures of Rs 100 each at a premium of 10% in full satisfaction of purchase consideration. The Debentures were redeemable 3 years later at a premium of 5%. Pass entries to record the above including redemption of debentures.

 A company with share capital must issue ...................... shares.

Explain the different types of debentures?

Fill in the blank.
For recording the issue of debentures as collateral security by a journal entry _______ account is debited.

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 in the books of Garvit Ltd.

On 1^st April 2015, P Ltd. Issued 6,000 12% Debentures of ₹ 100 each at par redeemable at a premium of 7%. The Debentures were to be redeemed at the end of the third year. Prepare Loss on the issue of 12% Debentures Account.

Krishna Ltd. had outstanding 20,000, 9% debentures of ₹ 100 each on 1^st April 2014. These debentures were redeemable at a premium of 10% in two equal installments starting from 31^st March 2018. The company had a balance of ₹ 4,00,000 in Debenture Redemption Reserve on 31^st March 2017. Pass necessary journal entries for the redemption of debentures in the books of Krishna Ltd. for the year ended 31^st March 2018.

Yogacara Ltd. (pharmaceutical company) appointed marketing expert, Mr Kartikay as the CEO of the company, with a target to penetrate their roots in the rural regions. Mr Kartika discussed the ways and means to achieve the target of the company with financial, production and marketing departmental heads and asked the finance manager to prepare the budget. After reviewing the suggestions given by all the departmental heads, the finance manager proposed the requirement of an additional fund of ₹52,50,000. Yogacara Ltd. is a zero-debt company. To avail of the benefits of financial leverage, the finance manager proposed to include debt in the capital structure. After deliberations, on April 1, 2020, the board of directors decided to issue 6% Debentures of ₹100 each to the public at a premium of 5%, redeemable after 5 years at ₹110 per share.

You are required to answer the following questions:

1. Calculate the number of debentures to be issued to raise additional funds.
2. Pass Journal entry for the allotment of debentures.
3. Pass Journal entry to write off the loss on issue of debentures
4. Calculate the amount of annual fixed obligation associated with debentures.
5. Prepare Loss on Issue of Debentures Account.

Pass necessary journal entries for the issue of debentures in the following cases :

1. Issued ₹ 75,00,000, 9% debentures of ₹100 each at a premium of 10% redeemable at a premium of 5% after 3 years.
2. Issued 8,000, 9% debentures of ₹100 each at a discount of 6% redeemable at a premium of 3% after 5 years.
3. Issued 90,000, 9% debentures of ₹100 each at par, redeemable at par after 4 years.

Pass necessary journal entries for the issue of debentures in the following cases :

1. Issued ₹ 7,00,000, 9% debentures of ₹ 100 each at a premium of 20% redeemable at a premium of 10% after 6 years.
2. Issued 10,000, 12% debentures of ₹ 100 each at 10% discount redeemable at a premium of 5% after 5 years.
3. Issued 75,000, 12% debentures of ₹ 100 each at par, redeemable at premium of 10% after three years.

Pass necessary journal entries for the issue of debentures in the following cases:

1. Issued 5,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5% after 5 years.
2. Issued 30,000, 12% debentures of ₹ 100 each at a premium of 5% and redeemable at par after 5 years.
3. Issued 8,750, 12% debentures of ₹100 each at par, redeemable at par after 5 years.