Volume-2 | Chapter-2 | Question 11 to 15 | Issue of Debentures | Ts grewal solution 2020-21 | Class-12th



Page No 9.52:

Question 11:

Alka Ltd . issued 5,000, 10% Debentures of  `  1,000 each at a discount of 10% redeemable at a premium of 5% after 5 years . According to the terms of issue  `  500 was payable  on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(`)

Credit

Amount

(`)

 

Bank A/c (5,000×500)

Dr.

 

25,00,000

 

 

  To Debenture Application A/c

 

 

 

25,00,000

 

(Received application money on 5,000 debentures)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

25,00,000

 

 

  To 10% Debentures A/c

 

 

 

25,00,000

 

(Transfer of application money to Debentures A/c)

 

 

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c (5,000×400)

Dr.

 

20,00,000

 

 

Discount on issue of Debentures A/c (5,000×100)

 

 

5,00,000

 

 

Loss on issue of Debentures A/c (5,000×50)

Dr.

 

2,50,000

 

 

  To 10% Debentures A/c (5,000×500)

 

 

 

25,00,000

 

  To Premium on Redemption of Debentures A/c (5,000×50)

 

 

 

2,50,000

 

(Allotment due on 5,000 Debentures at a discount of ` 100 per debentures and redeemable at premium of 5%)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

   20,00,000

 

 

  To Debenture Allotment A/c

 

 

 

20,00,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



Page No 9.52:

Question 12:

Amrit Ltd . was promoted by Amrit and Bhaskar with an authorised capital of  `  10,00,000 divide into 1,00,000 shares of  `  10 each.
The company decided to issue 1,000,6% Debentures of 
`  100 each to Amrit and Bhaskar  each for their services in incorporating the company.
Pass journal entry.



Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

(`)

Credit

Amount

(`)

 

 

 

 

 

 

 

Incorporation Cost A/c (2,000 × 100)

Dr.

 

2,00,000

 

 

  To 6% Debentures A/c

 

 

 

2,00,000

 

( Debentures issued to promoters)

 

 

 

 

 

 

 

 

 

 



Page No 9.53:

Question 13:

Joy Ltd. company bought a Building for  `  9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of  ` 100 each at a discount of 10%.

Give Journal entries.



Answer:

Books of Joy Limited
Journal

Date

Particulars

L.F.

Debit Amount

(`)

Credit Amount

(`)

 

Building A/c

Dr.

 

9,00,000

 

 

To Vendor A/c

 

 

9,00,000

 

(Building purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

1,00,000

 

 

To 10% Debentures A/c

 

 

10,00,000

 

(Issued 10,000, 10% debentures at 10% discount)

 

 

 

 

 

 

 

 

 

Working Note:

 

Number of debentute to be issued= Purchase consideration/issue price=9,00,000/90=10,000 Debentures



Page No 9.53:

Question 14:

Ananya 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 Ananya Ltd.



Answer:

Books of Ananya Ltd.   

Journal

Date

Particulars

L.F.

Debit Amount

`

Credit Amount

`

 

Sundry Assets A/c

Dr.

 

2,00,000

 

 

To Vendor A/c

 

 

2,00,000

 

(Business purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

65,000

 

 

To Bank A/c

 

 

65,000

 

(Amount paid to Vendor in cash)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debentures A/c

 

 

1,50,000

 

(Issued 1,500 debentures at 10% discount)

 

 

 

 

 

 

 

 

 

Working Note:

 

Number of debentute to be issued= Purchase consideration/issue price=1,35,000/90=1,500 Debentures



Page No 9.53:

Question 15:

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:

Books of Newton Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

`

Credit Amount

`

 

Machinery A/c

Dr.

 

5,76,000

 

 

To B

 

 

5,76,000

 

(Machinery purchased from B)

 

 

 

 

 

 

 

 

 

B

Dr.

 

5,76,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

24,000

 

 

To 9% Debenture A/c

 

 

6,00,000

 

(Issued 6,000 debentures at 4% discount)

 

 

 

 

 

 

 

 

 

Working Note:

 

Number of debentute to be issued= Purchase consideration/issue price

=5,76,000/100-4=5,76,000/96=6,000 Debentures


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