CBSE (Commerce) Class 12CBSE
Share
Notifications

View all notifications

NCERT solutions for Class 12 Accountancy chapter 2 - Issue and Redemption of Debentures

Login
Create free account


      Forgot password?

Chapters

NCERT Ncert Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Ncert Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Shaalaa.com

Chapter 2: Issue and Redemption of Debentures

Short Answer QuestionLong Answer QuestionNumerical Questions

Chapter 2: Issue and Redemption of Debentures Exercise Short Answer Question solutions [Pages 134 - 135]

Short Answer Question | Q 1 | Page 134

Short Answer Question

What is meant by a Debenture?

Short Answer Question | Q 2 | Page 134

Short Answer Question

What does a Bearer Debenture mean?

Short Answer Question | Q 3 | Page 134

Short Answer Question

State the meaning of ‘Debentures issued as a Collateral Security.

Short Answer Question | Q 4 | Page 134

Short Answer Question

What is meant by ‘Issue of debentures for Consideration other than Cash’?

Short Answer Question | Q 5 | Page 134

Short Answer Question

What is meant by ‘Issue of debenture at discount and redeemable at premium?

Short Answer Question | Q 6 | Page 134

Short Answer Question

What is ‘Capital Reserve’?

Short Answer Question | Q 7 | Page 134

Short Answer Question

What is meant by an ‘Irredeemable Debenture’?

Short Answer Question | Q 8 | Page 134

Short Answer Question

What is a ‘Convertible Debenture’?

Short Answer Question | Q 9 | Page 135

Short Answer Question

What is meant by ‘Mortgaged Debentures’?

Short Answer Question | Q 10 | Page 135

Short Answer Question

What is discount on issue of debentures?

Short Answer Question | Q 11 | Page 135

Short Answer Question

What is meant by ‘Premium on Redemption of Debentures’?

Short Answer Question | Q 12 | Page 135

Short Answer Question

How are debentures different from shares? Give two points.

Short Answer Question | Q 13 | Page 135

Short Answer Question

Name the head under which ‘discount on issue of debentures’ appears in the Balance Sheet of a company.

Short Answer Question | Q 14 | Page 135

What is meant by redemption of debentures?

Short Answer Question | Q 15 | Page 135

Short Answer Question

Can the company purchase its own debentures?

Short Answer Question | Q 16 | Page 135

Short Answer Question

What is meant by redemption of debentures by conversion?

Short Answer Question | Q 17 | Page 135

Short Answer Question

How would you deal with ‘Premium on Redemption of Debentures’?

Short Answer Question | Q 18 | Page 135

Short Answer Question

What is meant by ‘Redemption out of Capital?

Short Answer Question | Q 19 | Page 135

Short Answer Question

What is meant by redemption of debentures by ‘Purchase in the Open Market’?

Short Answer Question | Q 20 | Page 135

Short Answer Question

Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?

Chapter 2: Issue and Redemption of Debentures Exercise Long Answer Question solutions [Page 135]

Long Answer Question | Q 1 | Page 135

Long Answer Question

Explain the different types of debentures?

Long Answer Question | Q 2 | Page 135

Long Answer Question

Distinguish between a debenture and a share. Why is debenture known as loan capital? Explain.

Long Answer Question | Q 3 | Page 135

Long Answer Question

Describe the meaning of ‘Debenture Issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?

Long Answer Question | Q 4 | Page 135

Long Answer Question

How is ‘Discount on Issue of Debentures’ treated in the books of accounts? How will you deal with the ‘discount in issue of debentures’ when the debentures are to be redeemed in instalments?

Long Answer Question | Q 5 | Page 135

Long Answer Question

Explain the different terms for the issue of debentures with reference to their redemption.

Long Answer Question | Q 6 | Page 135

Long Answer Question

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

Long Answer Question | Q 7 | Page 135

Long Answer Question

Explain the guidelines of SEBI for creating Debenture Redemption Reserve.

Long Answer Question | Q 8 | Page 135

Long Answer Question

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

Long Answer Question | Q 9 | Page 135

Long Answer Question

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

Long Answer Question | Q 10 | Page 135

Long Answer Question

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

Chapter 2: Issue and Redemption of Debentures Exercise Numerical Questions solutions [Pages 135 - 138]

Numerical Questions | Q 1 | Page 135

G.Ltd. issued 75,00,000, 6% Debenture of Rs 50 each at par payable Rs 15 on application and Rs 35 on allotment, redeemable at par after 7 years from the date of issue of debenture. Record necessary entries in the books of Company.

Numerical Questions | Q 2 | Page 135

Y.Ltd. issued 2,000, 6% Debentures of Rs 100 each payable as follows: Rs 25 on application; Rs 50 on allotment and Rs 25 on First and Final call.

Numerical Questions | Q 3 | Page 136

A.Ltd. issued 10,000, 10% Debentures of Rs 100 each at a premium of 5% payable as follows:

Rs 10 on Application;

Rs 20 along with premium on allotment and balance on First and Final call. Record necessary Journal Entries.

Numerical Questions | Q 4 | Page 136

A. Ltd. issued 90,00,000, 9% Debenture of Rs 50 each at a discount of 8%, redeemable at par any time after 9 years. Record necessary entries in the books of A. Ltd.

Numerical Questions | Q 5 | Page 136

A. Ltd. issued 4,000, 9% Debentures of Rs 100 each on the following terms:

Rs 20 on Application;

Rs 20 on Allotment;

Rs 30 on First call; and

Rs 30 on Final call.

The public applied for 4,800 Debentures. Applications for 3,600 Debentures were accepted in full. Applications for 800 Debentures were allotted 400 Debentures and applications for 400 Debentures were rejected.

Numerical Questions | Q 6 | Page 136

T. Ltd. offered 2,00,000, 8% debenture of Rs 500 each on June 30, 2014 at a premium of 10% payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3,00,000 debentures and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debentures.

Numerical Questions | Q 7 | Page 136

X.Ltd. invites application for the issue of 10,000, 14% debentures of Rs 100 each payable as to Rs 20 on application, Rs 60 on allotment and the balance on call. The company receives applications for 13,500 debentures, out of which applications for 8,000 debentures are allotted in full, 5,000 only 40% and the remaining rejected. The surplus money on partially allotted applications is utilised towards allotment. All the sums due are duly received.

Numerical Questions | Q 8 | Page 136

R.Ltd. offered 20,00,000, 10% Debenture of Rs 200 each at a discount of 7% redeemable at premium of 8% after 9 years. Record necessary entries in the books of R. Ltd.

Numerical Questions | Q 9 | Page 136

M.Ltd. took over assets of Rs 9,00,00,000 and liabilities of Rs 70,00,000 of S.Ltd. and issued 8%Debenture of Rs 100 each. Record necessary entries in the books of M. Ltd.

Numerical Questions | Q 10 | Page 136

B.Ltd. purchased assets of the book value of Rs 4,00,000 and took over the liability of Rs 50,000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs,3,80,000, be paid by issuing debentures of Rs 100 each.

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.

Numerical Questions | Q 11 | Page 137

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.

Numerical Questions | Q 12 | Page 137

X.Ltd. issued 15,000, 10% debentures of Rs 100 each. Give journal entries and the Balance Sheet in each of the following cases:

(i) The debentures are issued at a premium of 10%;

(ii) The debentures are issued at a discount of 5%;

(iii) The debentures are issued as a collateral security to bank against a loan of Rs 12,00,000; and

(iv) The debentures are issued to a supplier of machinery costing Rs 13,50,000.

Numerical Questions | Q 13 | Page 137

Journalise the following:

(i) A debenture issued at Rs 95, repayable at Rs 100;

(ii) A debenture issued at Rs 95, repayable at Rs 105; and

(iii) A debenture issued at Rs 100, repayable at Rs 105;

The face value of debenture in each of the above cases is Rs 100.

Numerical Questions | Q 14 | Page 137

A.Ltd. issued 50,00,000, 8% Debenture of Rs 100 at a discount of 6% on April 01, 2009 redeemable at premium of 4% by draw of lots as under:

20,00,000 Debentures on March, 2011

10,00,000 Debentures on March, 2013

20,00,000 Debentures on March, 2014

Compute the amount of discount to be written-off in each year till debentures are paid. Also prepare discount/loss on issue of debenture account.

Numerical Questions | Q 15 | Page 137

A company issues the following debentures:

(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;

(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;

(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;

(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and

(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.

Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

Numerical Questions | Q 16 | Page 137

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.

Numerical Questions | Q 17 | Page 137

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.

Numerical Questions | Q 18 | Page 138

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).

Numerical Questions | Q 19 | Page 138

B. Ltd. issued 1,000, 12% debentures of Rs 100 each on April 01, 2014 at a discount of 5% redeemable at a premium of 10%.

Give journal entries relating to the issue of debentures and debentures interest for the period ending March 31, 2015 assuming that interest is paid half yearly on September 30 and March 31 and tax deducted at source is 10%.

Numerical Questions | Q 20 | Page 138

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?

Chapter 2: Issue and Redemption of Debentures

Short Answer QuestionLong Answer QuestionNumerical Questions

NCERT Ncert Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Ncert Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Shaalaa.com

Textbook solutions for Class 12






















NCERT solutions for Class 12 Accountancy chapter 2 - Issue and Redemption of Debentures

NCERT solutions for Class 12 Accountancy chapter 2 (Issue and Redemption of Debentures) include all questions with solution and detail explanation. This will clear students doubts about any question and improve application skills while preparing for board exams. The detailed, step-by-step solutions will help you understand the concepts better and clear your confusions, if any. Shaalaa.com has the CBSE Ncert Class 12 Accountancy - Company Accounts and Analysis of Financial Statements solutions in a manner that help students grasp basic concepts better and faster.

Further, we at Shaalaa.com provide such solutions so that students can prepare for written exams. NCERT textbook solutions can be a core help for self-study and acts as a perfect self-help guidance for students.

Concepts covered in Class 12 Accountancy chapter 2 Issue and Redemption of Debentures are Redemption of Debentures, Writing off Discount/Loss on Issue of Debentures, Interest on Debentures, Issue of Debentures with Terms of Redemption, Debentures as Collateral Security-concept, Issue of Debentures for Consideration Other than Cash, Over Subscription of Shares, Issue of Debentures, Types of Debentures, Distinction Between Shares and Debentures, Meaning of Debentures.

Using NCERT Class 12 solutions Issue and Redemption of Debentures exercise by students are an easy way to prepare for the exams, as they involve solutions arranged chapter-wise also page wise. The questions involved in NCERT Solutions are important questions that can be asked in the final exam. Maximum students of CBSE Class 12 prefer NCERT Textbook Solutions to score more in exam.

Get the free view of chapter 2 Issue and Redemption of Debentures Class 12 extra questions for Accountancy and can use Shaalaa.com to keep it handy for your exam preparation

S
View in app×