Arts (English Medium) Class 12 - CBSE Question Bank Solutions for Accountancy

Long Answer Question

Differentiate between redemption of debentures out of capital and out of profits.

Long Answer Question

Explain the guidelines of SEBI for creating Debenture Redemption Reserve.

Long Answer Question

Describe the steps for creating Sinking Fund for redemption of debentures.

Long Answer Question

Can a company purchase its own debentures in the open market? Explain

Long Answer Question

What is meant by conversion of debentures? Describe the method of such a conversion.

X.Ltd. purchased a Machinery from Y for an agreed purchase consideration of Rs 4,40,000 to be satisfied by the issue of 12% debentures of Rs 100 each at a premium of Rs 10 per debenture. Journalise the transactions.

A company issued debentures of the face value of Rs 5,00,000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs,1,00,000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.

Calculate the amount of discount to be written-off each year. Give journal entries also.

A company issued 10% Debentures of the face value of Rs,1,20,000 at a discount of 6% on April 01, 2011. The debentures are payable by annual drawings of Rs 40,000 commencing from the end of third year.

How will you deal with discount on debentures?

Show the discount on debentures account in the company ledger for the period of duration of debentures. Assume accounts are closed on March 31 every year.

What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice: (a) when debentures were issued at par with a condition to redeem them at premium; (b) when debentures were issued at premium with a condition to redeem that at par; and (c) when debentures were issued at discount with a condition to redeem them at premium?

On 1^st 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 31^st March 2019. The company created the necessary minimum amount of debenture redemption reserve and purchased the required amount of debenture redemption investments as per the provisions of Companies Act, 2013.
Pass the necessary journal entries for the redemption of debentures.

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.

Where is the address of the active cell displayed?

While issuing ______ type of Debentures, company doesn’t give any undertaking for the repayment of money borrowed by issuing such debentures.

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. The premium on redemption of debentures is ______.

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.

Record the necessary journal entries in the books of Sinco Ltd. assuming that the debentures have been issued:

1. At a discount of 10%.
2. At a premium of 10%.

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. Application for 12,000, 9% debentures were received. 9% debentures were allotted on pro-rata basis to all the applications. Excess money received with applications was refunded.
On 31.3.2022 the company decided to write off discount on issue of debentures according to the provisions of the Companies Act, 2013. On that date the company had ₹ 10,000 in its securities premium reserve account.

Pass necessary journal entries for the above transactions in the books of the company.

Pioneer Fitness Ltd. took over the running business of Healthy World Ltd. having assets of ₹ 10,00,000 and liabilities of ₹ 1,70,000 by:

1. Issuing 8,000 8% Debentures of ₹ 100 each at 5% premium redeemable after 6 years @ ₹ 110; and
2. Cheque for ₹ 50,000.

Pass the Journal entries in the books of Pioneer Fitness Ltd.

Give the meaning of 'Debentures issued as Collateral Security'.

Short Answer Question

Can the company purchase its own debentures?

Best Barcode Ltd. took a loan of  ₹ 5,00,000 from a bank giving  ₹ 6,00,000; 9% Debentures as collateral security. Pass journal entries regarding issue of debentures , if any, and show this loan in the Balance Sheet of the company.