12th | Ts grewal 2021-2022 Question 1 to 5 | Issue of Debenture

Page No 10.63:

Question 1:

JS 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.

 

Answer:

Books of JS Ltd.
Journal
Date	Particulars		L.F.	Debit `	Credit `
	Bank A/c	Dr.		50,000
	To 9% Debenture Application A/c				50,000
	(Debenture application money received for 2,000 debentures at ` 25 each)
	9% Debenture Application A/c	Dr.		50,000
	To 9% Debenture A/c				50,000
	(Debenture application money transferred to 9% Debentures A/c)
	9% Debenture Allotment A/c	Dr.		50,000
	To 9% Debentures A/c				50,000
	(Debenture allotment money due on 2,000 Debentures at ` 25 each)
	Bank A/c	Dr.		50,000
	To 9% Debenture Allotment A/c				50,000
	(Debenture allotment money received)
	9% Debenture First and Final Call A/c	Dr.		1,00,000
	To 9% Debentures A/c				1,00,000
	(Debenture first and final call money due on 2,000 debentures at ` 50 each)
	Bank A/c	Dr.		1,00,000
	To 9% Debenture First and Final Call A/c				1,00,000
	(Debenture first and final call received)

 

Page No 10.63:

Question 2:

Droga  Ltd. issued 2,000; 9% Debentures of ` 100 each on the following terms:
`20 on applications ;` 20 on allotment ; ` 30 on first call ; ` 30 on final call.
The public applied for 2,400 debentures. Applications for 1,800 debentures were accepted in full. Applications for 400 debentures were allotted 200 debentures and applications for 200 debentures were rejected. Pass necessary Journal entries.

Answer:

Books of Droga Ltd.
Journal
Date	Particular		L.F.	Debit `	Credit `
	Bank A/c	Dr.		48,000
	To 9% Debenture Application A/c				48,000
	(Debenture application money received for 2,400 debentures at ` 20 each)
	9% Debenture Application A/c	Dr.		48,000
	To 9% Debentures A/c				40,000
	To 9% Debentures Allotment A/c				4,000
	To Bank A/c				4,000
	(Debenture application money transferred to 9% Debenture account for 2,000 Debenture, adjusted to Debenture Allotment account for 200 Debentures and money refunded for 200 debentures)
	9% Debenture Allotment A/c	Dr.		40,000
	To 9% Debentures A/c				40,000
	(Debenture allotment money due on 2,000 debentures at ` 20 each)
	Bank A/c	Dr.		36,000
	To 9% Debentures Allotment A/c				36,000
	(Debenture allotment money received)
	Debenture First Call A/c	Dr.		60,000
	To 9% Debentures A/c				60,000
	(Debenture first call money due on 2,000 9% debenture at ` 30 each)
	Bank A/c	Dr.		60,000
	To Debenture First Call A/c				60,000
	(Debenture first call money received)
	Debenture Final Call A/c	Dr.		60,000
	To 9% Debentures A/c				60,000
	(Debentures final call money due on 2,000 9% Debentures at ` 30 each)
	Bank A/c	Dr.		60,000
	To Debenture Final Call A/c				60,000
	(Debenture final call received on 2,000 9% Debenture at ` 30 each)

 

Page No 10.63:

Question 3:

Venus 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.

Answer:

Journal
Date	Particulars		L.F.	Debit  (`)	Credit  (`)
	Bank A/c (60,000 ×100)	Dr.		60,00,000
	To Debenture Application and Allotment A/c				60,00,000
	(Received application money on 60,000 Debenture)
	Debenture Application and Allotment A/c	Dr.		60,00,000
	To 10% Debentures  A/c (40,000 ×100)				40,00,000
	To Bank A/c				20,00,000
	(Application money transferred to Debentures A/c)

 

Page No 10.64:

Question 4:

Nipa Limited issued ` 10,00,000 Debentures of ` 100 each at a premium of 10% , payable 25% on application (including premium) and the balance on allotment . The debentures were applied for and the amount was dully received.
You are required to give Journal entries and prepare Cash Book.

Answer:

Face Value of Debenture = ` 100

Premium (` 100 × 10%) = ` 10

∴ Issue Price = ` 110

Amount Payable as:

 

Journal
Date	Particulars		L.F.	Debit `	Credit `
	Debenture Application A/c	Dr.		2,50,000
	To Debentures A/c				1,50,000
	To Securities Premium A/c				1,00,000
	(Debenture application money received for 10,000 debentures at ` 25 including premium of `10 each transferred to debenture account)
	Debenture Allotment A/c	Dr.		8,50,000
	To Debentures A/c				8,50,000
	(Debentures allotment due on 10,000 Debentures at ` 85 each)

 

Cash Book
Dr.							Cr.
Date	Particulars	L.F.	Bank `	Date	Particulars	L.F.	Bank `
	Debenture Application		2,50,000
	Debenture Allotment		8,50,000
					Balance c/d		11,00,000
			11,00,000				11,00,000

On Application (25%)	` 25 including premium of ` 10 (i.e. ` 10 + 15)
On Allotment (85%)	` 85 per debenture

Page No 10.64:

Question 5:

Raj Ltd. issued 5,000; 8% Debentures of ` 100 each at a premium of 5% payable as follows:
` 10 on application ; ` 20 along with premium on allotment and balance on first and final call.
Pass necessary Journal entries.

Answer:

Books of Raj Ltd.
Journal
Date	Particulars		L.F.	Debit `	Credit `
	Bank A/c	Dr.		50,000
	To 8% Debenture Application A/c				50,000
	(Debenture application money received for 5,000 debentures at ` 10 each)
	8% Debenture Application A/c	Dr.		50,000
	To 8% Debentures A/c				50,000
	(Debenture application money transferred to 8% Debentures A/c)
	8% Debenture Allotment A/c	Dr.		1,00,000
	To 8% Debentures A/c				75,000
	To Securities Premium A/c				25,000
	(Debenture allotment due on 5,000 8% Debentures at ` 20 including premium of ` 5)
	Bank A/c	Dr.		1,00,000
	To 8% Debentures Allotment A/c				1,00,000
	(Debenture allotment money received)
	8% Debentures First and Final Call A/c	Dr.		3,75,000
	To 8% Debenture A/c				3,75,000
	(Debenture first and final call due on 5,000 Debentures at ` 75 each)
	Bank A/c	Dr.		3,75,000
	To 8% Debenture First and Final Call A/c				3,75,000
	(Debenture first and final call received)

 

Click on Below link for more questions Of Volume-2 of 12th

Chapter-2: Issue of Debenture | 2021-2022

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