Volume-2 | Chapter-2 | Question 6 to 10 | Issue of Debentures | Ts grewal solution 2020-21 | Class-12th

Page No 9.52:

Question 6:

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:

On Application (25%)

` 25 including premium of ` 10 (i.e. ` 10 + 15)

On Allotment (85%)

` 85 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

`

Credit Amount

`

 

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

 

 

 

 

 

 

 

 



Page No 9.52:

Question 7:

Alok Ltd. issued 7,000, 10% Debentures of ` 500 each at a premium of ` 50 per debenture redeemable at a premium of 10% after 5 years. According to the terms of issue, ` 200 was payable on application and balance on allotment.
Record necessary Journal entries at the time of issue of 10% Debentures.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(`)

Credit

Amount

(`)

 

Bank A/c (7,000×200)

Dr.

 

14,00,000

 

 

  To Debenture Application A/c

 

 

 

14,00,000

 

(Received application money on 7,000 debentures)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

14,00,000

 

 

  To 10% Debentures A/c

 

 

 

14,00,000

 

(Transfer of application money to Debentures A/c)

 

 

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c (7,000×350)

Dr.

 

24,50,000

 

 

Loss on issue of Debentures A/c (7,000×50)

Dr.

 

3,50,000

 

 

  To 10% Debentures A/c (7,000×300)

 

 

 

21,00,000

 

  To Securities Premium Reserve A/c (7,000×50)

 

 

 

3,50,000

 

  To Premium on Redemption of Debentures A/c(7,000×50)

 

 

 

3,50,000

 

(Allotment due on 7,000 Debentures at a premium of ` 50 per debentures and redeemable at premium of 10%)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

   24,50,000

 

 

  To Debenture Allotment A/c

 

 

 

24,50,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Page No 9.52:

Question 8:

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 .



Answer:

In the Books of Vijay Laxmi Ltd.

Journal

 

Date

Particulars

L.F.

Debit

Amount

`

Credit Amount

`

 

Bank A/c

Dr.

 

22,95,000

 

 

To Debenture Application and Allotment A/c

 

 

 

22,95,000

 

(Application money received on 13,500 12% debenture)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

22,95,000

 

 

To 12% Debentures A/c

 

 

 

10,00,000

 

To Securities Premium Reserve A/c

 

 

 

7,00,000

 

To Bank A/c

 

 

 

5,95,000

 

(10,000; 12% Debentures issued at a premium of ` 70 and excess money refunded)

 

 

 

 

 

 

 

 



 Page No 9.52:

Question 9:

Iron Products Ltd. issued 5,000; 9% Debentures of ` 100 each at a premium of ` 40 payable as follows;
(i
` 40 , including premium of ` 10 on applications;
(ii) 
` 45, including premium of ` 15 on allotment ; and
(iii) Balance as first and final call.
The issue was subscribed and allotment made. Calls were made and due amount  was received .
Pass Journal entries .



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(`)

Credit

Amount

(`)

 

Bank A/c (5,000×40)

Dr.

 

2,00,000

 

 

  To Debenture Application A/c

 

 

 

2,00,000

 

(Application money received)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

2,00,000

 

 

  To 9% Debentures A/c (5,000×30)

 

 

 

1,50,000

 

  To Security Premium Reserve A/c (5,000×10)

 

 

 

50,000

 

(Application money adjusted)

 

 

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c (5,000×45)

Dr.

 

2,25,000

 

 

  To 9% Debentures A/c  (5,000×30)

 

 

 

1,50,000

 

  To Security Premium Reserve A/c (5,000×15)

 

 

 

75,000

 

(Allotment money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (5,000×45)

Dr.

 

2,25,000

 

 

   To Debenture Allotment A/c

 

 

 

2,25,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

 

 

 Debenture First and Final call A/c (5,000×55)

Dr.

 

2,75,000

 

 

  To 9% Debentures A/c (5,000×40)

 

 

 

2,00,000

 

  To Security Premium Reserve A/c (5,000×15)

 

 

 

75,000

 

(First call money due)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,75,000

 

 

  To Debenture Final and Final call A/c

 

 

 

2,75,000

 

(First Call money Received)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Page No 9.52:

Question 10:

Anupama Ltd . issued 12,000; 8% Debentures of  `  100 each at a discount of 5% payable as 25% on application;20% on allotment and balance after three months.
Pass Journal entries.



Answer:

Face Value of Debenture = ` 100

Discount (` 100 × 5%) = ` 5

Issue Price = ` 95

Amount Payable as:

On Application (25%)

` 25 per debenture

On Allotment (20%)

` 20 (25 – 5) per debenture

On First and Final Call (50%)

` 50 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

`

Credit Amount

`

 

Bank A/c

Dr.

 

3,00,000

 

 

To 8% Debenture Application A/c

 

 

3,00,000

 

(Application money received for 12,000 8% Debentures at ` 25 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

3,00,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Debenture application money transferred to 8% Debentures account)

 

 

 

 

 

 

 

 

 

8% Debentures Allotment A/c

Dr.

 

2,40,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

60,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Allotment money due on 12,000 8% Debentures at ` 20 each at discount of ` 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

To 8% Debenture Allotment A/c

 

 

2,40,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c

Dr.

 

6,00,000

 

 

To 8% Debentures A/c

 

 

6,00,000

 

(First and final call money due on 12,000 8% Debentures at ` 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,00,000

 

 

To 8% Debentures First and Final Call A/c

 

 

6,00,000

 

(First and Final call money received)

 

 

 

 

 

 

 

 

 


Click on Below link for more questions of Issue Of Debenture

From Question No. 1 to 5

From Question No. 6 to 10

From Question No. 11 to 15

From Question No. 16 to 20

From Question No. 21 to 25

From Question No. 26 to 30

Jump to chapter list of solution-2019-20