Issue of Debentures Accountancy - Issue of Debentures

Debentures are shown in the Balance Sheet of a company under the head of:

1. Non-current Liabilities.
2. Current Liabilities.
3. Share Capitat.
4. None of these.

Debenture interest is paid:

1. At a predetermined rate.
2. At variable rate.
3. At a rate based on net profit of the company.
4. At a rate as determined by the company from time to time.

When debentures are issued at a discount, the discount should be written off

1. After debentures have been redeemed.
2. Within 5 years of the issue of debentures.
3. During the life of the debentures.
4. None of the above.

Debentureholders are:

1. Owners of the company.
2. Lenders of the company.
3. Vendors of the company.
4. Customers of the company.

Discount or Loss on Issue of Debentures to be written off after 12 months from the date of Balance Sheet or after the period of Operating Cycle is shown as:

1. Other Current Assets.
2. Other Non-current Assets.
3. Other Long-term Liabilities.
4. Other Current Liabilities.

Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a premium of 5% redeemable at par.

Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 4,00,000; 9% Debentures of ₹ 100 each at a premium of 8% redeemable at 10% premium.

A Ltd. purchased machinery from Kiran Machines Ltd. and paid them by issuing a cheque for ₹ 60,000 and balance by issue of 4,000 10% Debenture of ₹ 100 each at premium. On the basis of this information fill the missing values in the following Journal entries.

Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at par redeemable at 10% premium.

Vijay Laxmi Ltd. invited applications for 10,000; 12% Debentures of ₹ 100 each at a premium of ₹ 70 per debenture. The full amount was payable on application.
Applications were received for 13,500 debentures. Applications for 3,500 debentures were rejected and application money was refunded. Debentures were allotted to the remaining applications.
Pass necessary journal entries in the books of vijay Laxmi Ltd. for the above transaction.

X Ltd. took a loan of ₹ 3,00,000 from IDBI Bank. The company issued 4,000; 9% Debentures of ₹ 100 each as a collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.

XYZ Ltd. issued 5,000, 10% Debentures of ₹ 100 each on 1st April, 2015 at a discount of 10% redeemable at a premium of 10% after 4 years. Give journal entries for the year ended 31st March, 2016, assuming that the interest was payable half-yearly on 30th September and 31st March. Tax is to be deducted @ 10%.

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.

Iron Products Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows;

1. ₹ 40, including premium of ₹ 10 on applications.
2. ₹ 45, including premium of ₹ 15 on allotment.
3. Balance as first and final call.

The issue was subscribed and allotment made. Calls were made and due amount was received.
Pass Journal entries.

On 1st June, 2015, 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. Loss on issue of Debentures is to be written off over the life of the debentures.
Prepare the Balance Sheet (extract) as at 31st March, 2016 and 31st March, 2017 showing Loss on issue of Debentures.

X Ltd. took a loan of ₹ 3,00,000 from IDBI Bank. The company issued 4,000; 9% Debentures of ₹ 100 each as a collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.

XYZ Ltd. issued 5,000, 10% Debentures of ₹ 100 each on 1st April, 2015 at a discount of 10% redeemable at a premium of 10% after 4 years. Give journal entries for the year ended 31st March, 2016, assuming that the interest was payable half-yearly on 30th September and 31st March. Tax is to be deducted @ 10%.

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.

Iron Products Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows;

1. ₹ 40, including premium of ₹ 10 on applications.
2. ₹ 45, including premium of ₹ 15 on allotment.
3. Balance as first and final call.

The issue was subscribed and allotment made. Calls were made and due amount was received.
Pass Journal entries.

On 1st June, 2015, 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. Loss on issue of Debentures is to be written off over the life of the debentures.
Prepare the Balance Sheet (extract) as at 31st March, 2016 and 31st March, 2017 showing Loss on issue of Debentures.