Question 13 Marks
Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a premium of 5% redeemable at par.
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a premium of 5% redeemable at par.
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Question 23 Marks
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.
Issued ₹ 4,00,000; 9% Debentures of ₹ 100 each at a premium of 8% redeemable at 10% premium.
Question 33 Marks
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.
Question 43 Marks
Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at par redeemable at 10% premium.
A Co.Ltd. issued ₹ 40,000; 12% Debentures at par redeemable at 10% premium.
Question 53 Marks
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.
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.
Question 63 Marks
Pass necessary journal entries for the issue of Debentures in the following cases:
₹ 70,000; 12% Debentures of ₹ 100 each issued at a premium of 5% redeemable at of ₹ 110.
₹ 70,000; 12% Debentures of ₹ 100 each issued at a premium of 5% redeemable at of ₹ 110.
Question 73 Marks
X Ltd. issued 10% Debentures of nominal value of ₹ 10,00,000 as follows:
- To sundry persons for cash at par - ₹ 5,00,000 nominal.
- To a vendor for ₹ 5,50,000 for purchase of fixed assets - ₹ 5,00,000 nominal.
Question 83 Marks
On 1st April 2012, Z Ltd. issued ₹ 10,00,000, 10% Debentures of ₹ 100 each at 94% redeemable at par. The debentures are to be redeemed by drawings method in the following manner:
Calculate the amount of discount on issue of debentures to be written off each year.
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Year end
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2nd
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3rd
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4th
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5th
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Nominal value of Debentures to be Redeemed.
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10%
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20%
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30%
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40%
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Answer
Working Notes:
WN1: Calculation of discount amount to be written-off
Discount $=10,00,000\times\frac{6}{100}=60,000$
View full question & answer→| At the end of | Outstanding Balance | Weight | Discount Written-off |
| Year I | 10,00,000 | 10 | $15,000\Big(\frac{10}{40}\times60,000\Big)$ |
| Year II | 10,00,000 | 10 | $15,000\Big(\frac{10}{40}\times60,000\Big)$ |
| Year III | 9,00,000 | 9 | $13,500\Big(\frac{9}{40}\times60,000\Big)$ |
| Year IV | 7,00,000 | 7 | $10,500\Big(\frac{7}{40}\times60,000\Big)$ |
| Year V | 4,00,000 | 4 | $6,000\Big(\frac{4}{40}\times60,000\Big)$ |
| 40 |
WN1: Calculation of discount amount to be written-off
Discount $=10,00,000\times\frac{6}{100}=60,000$
Question 93 Marks
Lotus Ltd. took over assets of ₹ 2,50,000 and liabilities of ₹ 30,000 of Goneby Company for the purchase consideration of ₹ 3,30,000. Lotus Ltd. paid the purchase consideration by issuing debentures of ₹ 100 each at 10% premium.
Give journal entries in the books of Lotus Ltd.
Give journal entries in the books of Lotus Ltd.
Answer
Note:
No. of Debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{3,30,000}{100+10}=\frac{3,30,000}{110}$
$=3,000\text{ debentures}$
View full question & answer→Note:No. of Debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{3,30,000}{100+10}=\frac{3,30,000}{110}$
$=3,000\text{ debentures}$
Question 103 Marks
Footfall Ltd. issues 10,000 Debentures of ₹ 100 each at a discout of 10% redeemable at a premium of 5% after the explry of three yeras.
Pass journal entries for the issue of these debentures.
Pass journal entries for the issue of these debentures.
Question 113 Marks
Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a primium of 25% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a primium of 25% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{18,00,000}{100+25}=\frac{18,00,000}{125}$
$=14,400\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{18,00,000}{100+25}=\frac{18,00,000}{125}$
$=14,400\text{ debentures}$
Question 123 Marks
Pass necessary journal entries for the issue of Debentures in the following cases:
₹ 40,000; 12% Debentures of ₹ 100 each issued at a premium of 5% redeemable at par.
₹ 40,000; 12% Debentures of ₹ 100 each issued at a premium of 5% redeemable at par.
Question 133 Marks
Perfect Barcode Ltd. purchased computers from M/s. Computer Mart and paid the consideration as follows:
- 1,000, 10% Debentures of ₹ 100 each at a discount of 10%.
- Issued a cheque for ₹ 80,000 for the balance amount.
Question 143 Marks
Fill the missing values in the following:
Question 153 Marks
Deepak Ltd purchased furniture of ₹ 2,20,000 from M/s. Furniture Mart. 50% of the amount was paid to M/s. Furniture Mart by accepting a Bill of Exchanged and for the balance the company issued 9% Debenture of ₹ 100 each at a premium of 10% in favour of M/s. Furniture Mart.
Pass Journal entries in the books of Deepak Ltd.
Pass Journal entries in the books of Deepak Ltd.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{1,10,000}{100+10}=\frac{1,10,000}{110}$
$=1,000\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{1,10,000}{100+10}=\frac{1,10,000}{110}$
$=1,000\text{ debentures}$
Question 163 Marks
R Ltd. purchased the assets of S Ltd. for ₹ 5,00,000. It also agreed to take over the liabilities of S Ltd. amounted to ₹ 2,00,000 for a purchase consideration of ₹ 2,80,000. The payment of S Ltd. was made by issue of 9% Debentures of ₹ 100 each at par.
Pass necessary journal entries in the books of R Ltd.
Pass necessary journal entries in the books of R Ltd.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{2,80,000}{100}=2,800\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{2,80,000}{100}=2,800\text{ debentures}$
Question 173 Marks
Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a premium of 10% redeemable at 110%.
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a premium of 10% redeemable at 110%.
Question 183 Marks
Journalise the following transaction at the time of issue of 12% Debentures:
Nandan Ltd. issued ₹ 90,000, 12% Debentures of ₹ 100 each at a discount of 5% redeemable at 110%.
Nandan Ltd. issued ₹ 90,000, 12% Debentures of ₹ 100 each at a discount of 5% redeemable at 110%.
Question 193 Marks
ABC Ltd. issued 40,000; 10% Debentures of ₹ 100 each at par for cash payable in full along with the application. Applications were received for 60,000 debentures.
Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.
Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.
Question 203 Marks
Complete the following Journal entries:
Question 213 Marks
Write any three points of difference between equity shares and debentures.
Answer
View full question & answer→Difference between Debenture and share.
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Basis
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Debenture
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Share
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1
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Ownership
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Debenture means debt taken by the company. Therefore, a debentureholder is a lender.
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Share means capital. Hence, a shereholder is the Owner.
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2
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Return.
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Debentureholder gets interest at the stated rate whether the company earns profit or not.
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A shareholder gets dividend on investment.
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3
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Repayment.
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Debenture are issued for a specified period. Hence, the amount of debentures is repaid on the due date.
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Normally, the amount of share is not repaid during the lifetime of the company. However, preference share have a specified life and are redeemed on due date.
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4
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Issue at Discount.
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Debenture can be issued at discount.
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Share cannot be issued at discount except Sweat Equity shares.
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5
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Security.
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Debentures may or may not be secured by a change on the assets of the company.
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Share are not secured.
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Question 223 Marks
A company issued 9% Debentures of ₹ 10,00,000 at 8% discount, redeemable at par. The debentures are to be redeemed by drawings method in the following manner:
Calculate the amount of discount on issue of debentures to be written off each year.
| Year-end | Amount (Face Value) (₹) |
| 2 | 1,00,000 |
| 3 | 2,00,000 |
| 4 | 3,00,000 |
| 5 | 4,00,000 |
Answer
View full question & answer→Calculation of amount of Discount to be written off every year: Amount of Discount = 10,00,000 × 8% = ₹ 80,000
| Year end | Outstanding Amount (₹) | Ratio | Discount |
| 1 | 10,00,000 | 10 | $80,000\times\frac{10}{40}\times20,000$ |
| 2 | 10,00,000 | 10 | $80,000\times\frac{10}{40}\times20,000$ |
| 3 | 9,00,000 | 9 | $80,000\times\frac{9}{40}\times18,000$ |
| 4 | 7,00,000 | 7 | $80,000\times\frac{7}{40}\times14,000$ |
| 5 | 4,00,000 | 4 | $80,000\times\frac{4}{40}\times8,000$ |
| Total | 40 | 80,000 |
Question 233 Marks
Pass necessary journal entries for the issue of Debentures in the following cases:
₹ 80,000; 15% Debentures of ₹ 100 each issued at a premium of 10% redeemable at a premium of 10%.
₹ 80,000; 15% Debentures of ₹ 100 each issued at a premium of 10% redeemable at a premium of 10%.
Question 243 Marks
Vishwas Ltd. issued 2,000; 9% Debentures of ₹ 100 each payable as follows:
₹ 25 on application; ₹ 25 on allotment and ₹ 50 on first and final call.
Applications were received for all the debentures along with the application money did allotment was made. Call money was also received on the due date.
Pass necessary Journal entries in the books of the company.
₹ 25 on application; ₹ 25 on allotment and ₹ 50 on first and final call.
Applications were received for all the debentures along with the application money did allotment was made. Call money was also received on the due date.
Pass necessary Journal entries in the books of the company.
Question 253 Marks
Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 6,00,000; 9% Debentures of ₹ 100 each at par, repayable at a premium of 10%.
Issued ₹ 6,00,000; 9% Debentures of ₹ 100 each at par, repayable at a premium of 10%.
Question 263 Marks
Wye Ltd. purchased an established business for ₹ 2,00,000 payable as ₹ 65,000 by cheque and the balance by issuing 9% Debentures of ₹ 100 each at a discount of 10%.
Give journal entries in the books of Wye Ltd.
Give journal entries in the books of Wye Ltd.
Answer
Working Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{1,35,000}{90}=1,500\text{ debentures}$
View full question & answer→Working Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{1,35,000}{90}=1,500\text{ debentures}$
Question 273 Marks
Narain Laxmi Ltd. invited applications for issuing 7,500; 12% Debentures of ₹ 100 each at a premium of ₹ 35 per debenture. The full amount was payable on application. Applications were received for 10,000 Debentures. Allotment was made to all the applications on pro rata.
Pass necessary Journal entries for the above transactions in the books of Narain Laxmi Ltd.
Pass necessary Journal entries for the above transactions in the books of Narain Laxmi Ltd.
Question 283 Marks
Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 80,000; 10% Debentures of ₹ 100 each at par repayable at a premium of 10%.
Issued ₹ 80,000; 10% Debentures of ₹ 100 each at par repayable at a premium of 10%.
Question 293 Marks
Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a discount of 10% redeemable at par
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a discount of 10% redeemable at par
Question 303 Marks
Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 30,000; 10% Debentures of ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
Issued ₹ 30,000; 10% Debentures of ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
Question 313 Marks
Pass journal entries in the following cases:
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a discount of 5% and redeemable at 5% premium.
A Co.Ltd. issued ₹ 40,000; 12% Debentures at a discount of 5% and redeemable at 5% premium.
Question 323 Marks
Pass necessary journal entries for the issue of Debentures in the following cases:
₹ 40,000; 15% Debentures of ₹ 100 each issued at a discount of 10% redeemable at par.
₹ 40,000; 15% Debentures of ₹ 100 each issued at a discount of 10% redeemable at par.
Question 333 Marks
Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 28,000; 10% Debentures of ₹ 100 each at a premium of 15% redeemable at par.
Issued ₹ 28,000; 10% Debentures of ₹ 100 each at a premium of 15% redeemable at par.
Question 343 Marks
Romi Ltd. acquired assets of ₹ 20 lakhs and took over creditors of ₹ 2 lakhs from Kapil Enterprises.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.
Romi Ltd. issued 8% Debentures of ₹ 100 each at a discount of 10% as purchase consideration.
Record necessary journal entries in the books of Romi Ltd.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{18,00,000}{100-10}=\frac{18,00,000}{90}$
$=20,000\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{18,00,000}{100-10}=\frac{18,00,000}{90}$
$=20,000\text{ debentures}$
Question 353 Marks
Newton Ltd. purchased a Machinery from B for ₹ 5,76,000 to be paid by the issue of 9% Debentures of ₹ 100 each at 4% discount. Journalise the trasactions.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{5,76,000}{100-4}=\frac{5,76,000}{96}$
$=6,000\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{5,76,000}{100-4}=\frac{5,76,000}{96}$
$=6,000\text{ debentures}$
Question 363 Marks
Pass necessary journal entries relating to the issue of Debentures for the following:
Issued ₹ 10,00,000; 9% Debentures of ₹ 100 each at a premium of 5%,redeemable at par.
Issued ₹ 10,00,000; 9% Debentures of ₹ 100 each at a premium of 5%,redeemable at par.
Question 373 Marks
A limited company bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the nominal (face) value of ₹ 100 each at a discount of 10%.
Give journal entries.
Give journal entries.
Answer
Note:
No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{9,00,000}{90}=10,000\text{ debentures}$
View full question & answer→Note:No. of debentures to be issued $=\frac{\text{Purchase Consideration}}{\text{Issue Price}}$
$=\frac{9,00,000}{90}=10,000\text{ debentures}$