Page No 9.55:
Question 26:
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.
Answer:
Best Barcode Ltd. |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
2. Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
5,00,000 |
3. Current Liabilities |
|
|
Total |
|
5,00,000 |
|
|
|
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
5,00,000 |
Total |
|
5,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
1 |
Long-Term Borrowings |
|
|
Loan
(Secured by issue of 9% Debentures of Rs 6,00,000 as Collateral
Security) |
5,00,000 |
|
|
|
2 |
Cash and Cash Equivalents |
|
|
Cash at Bank |
5,00,000 |
|
|
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Bank
A/c |
Dr. |
|
5,00,000 |
|
|
To Loan A/c |
|
|
5,00,000 |
|
|
(Loan
taken against issuing 9% Debentures as collateral Security) |
|
|
|
|
|
|
|
|
|
|
Alternative Method:
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Bank
A/c |
Dr. |
|
5,00,000 |
|
|
To Loan A/c |
|
|
5,00,000 |
|
|
(Loan
taken against issuing 9% debentures as collateral Security) |
|
|
|
|
|
|
|
|
|
|
|
Debenture
Suspense A/c |
Dr. |
|
6,00,000 |
|
|
To 9% Debentures A/c |
|
|
6,00,000 |
|
|
(Issued
9% Debentures of Rs 6,00,000 as collateral security) |
|
|
|
|
|
|
|
|
|
Posting
in the Company's Balance Sheet
Best Barcode Ltd. |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
2. Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
5,00,000 |
3. Current Liabilities |
|
|
Total |
|
5,00,000 |
|
|
|
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
5,00,000 |
Total |
|
5,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan (Secured by issue
of 9% Debentures of Rs 6,00,000 as
Collateral Security) |
5,00,000 |
|
|
9% Debentures (Issued
as Collateral Security to Bank against loan) |
6,00,000 |
|
|
Less: Debenture Suspense Account |
6,00,000 |
- |
|
|
5,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
5,00,000 |
|
|
|
|
Page
No 9.55:
Question 27:
A
company took a loan of ` 4,00,000 from Bandhan
Bank Ltd. and issued 8% Debentures of ` 4,00,000 as a collateral security.
Answer:
When
Debentures Issued as Collateral Security are shown separately
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Bank
A/c |
Dr. |
|
4,00,000 |
|
|
To Loan from Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
(Loan
taken against issuing 8% Debentures as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
Debenture
Suspense A/c |
Dr. |
|
4,00,000 |
|
|
To 8% Debenture A/c |
|
|
4,00,000 |
|
|
(Debentures
issued as collateral security) |
|
|
|
|
|
|
|
|
|
Posting
in the Company's Balance Sheet (When Debentures Issued
as Collateral Security are shown separately)
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I Equity and Liabilities |
|
|
1.Shareholders’ Funds |
|
|
2.Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
4,00,000 |
3.Current Liabilities |
|
|
Total |
|
4,00,000 |
|
|
|
II Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
4,00,000 |
Total |
|
4,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan from Bandhan Bank (Secured by issue of Debentures of Rs
4,00,000) |
4,00,000 |
|
|
8% Debentures (Issued
as Collateral Security to Bank against Loan) |
4,00,000 |
|
|
Less: Debenture Suspense Account |
4,00,000 |
- |
|
|
4,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
4,00,000 |
|
|
|
|
Alternative
Method: When
debentures Issued as Collateral Security are not shown separately
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Bank
A/c |
Dr. |
|
4,00,000 |
|
|
To Loan From Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
(Loan
taken from Bandhan Bank secured by issuing
Debentures as collateral security) |
|
|
|
|
|
|
|
|
|
|
(When
Debentures Issued as
Collateral Security are not shown separately)
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
2. Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
4,00,000 |
3. Current Liabilities |
|
|
Total |
|
4,00,000 |
|
|
|
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
4,00,000 |
Total |
|
4,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
1 |
Long-Term Borrowings |
|
|
Secured: |
|
|
Loan from Bandhan Bank (Secured by issue of 8% Debentures of
Rs 4,00,000 as Collateral Security) |
4,00,000 |
|
|
|
2 |
Cash and Cash Equivalents |
|
|
Cash at Bank |
4,00,000 |
|
|
|
Page
No 9.55:
Question 28:
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.
Answer:
When Debentures Issued as Collateral Security is
shown separately
X Ltd. |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
2. Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
3,00,000 |
3. Current Liabilities |
|
|
Total |
|
3,00,000 |
|
|
|
II. Assets |
|
|
1.Non-Current Assets |
|
|
2.Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
3,00,000 |
Total |
|
3,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan From
IDBI(Secured by issue of Debentures of Rs 4,00,000) |
3,00,000 |
|
|
9 % Debentures (Issued
as Collateral Security against loan) |
4,00,000 |
|
|
Less: Debenture Suspense Account |
4,00,000 |
- |
|
|
3,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
3,00,000 |
|
|
|
|
Alternative
Method: When
Debentures Issued as Collateral Security are not shown separately
X Ltd. |
||
Balance Sheet |
||
Particulars |
Note No. |
Amount (Rs) |
I. Equity and Liabilities |
|
|
1. Shareholders’ Funds |
|
|
2. Non-Current
Liabilities |
|
|
a. Long-Term Borrowings |
1 |
3,00,000 |
3.Current Liabilities |
|
|
Total |
|
3,00,000 |
|
|
|
II. Assets |
|
|
1. Non-Current Assets |
|
|
2. Current Assets |
|
|
a. Cash and Cash
Equivalents |
2 |
3,00,000 |
Total |
|
3,00,000 |
NOTES
TO ACCOUNTS
Note No. |
Particulars |
Amount (Rs) |
|
|
|
1 |
Long-Term Borrowings |
|
|
Secured: |
|
|
Loan From IDBI (Secured
by issue of 9% Debentures of Rs 4,00,000 as Collateral Security) |
3,00,000 |
|
|
|
2 |
Cash and Cash Equivalents |
|
|
Cash at Bank |
3,00,000 |
|
|
|
Page
No 9.55:
Question 29:
S.
Singh Limited obtained a loan of ` 5,00,000 from State Bank of India @ 10% p.a. interest. The
company issued ` 7,50,000, 10% Debentures of ` 100 each in favour of State
Bank of India as Collateral Security. Pass necessary Journal entries for the
above transactions:
(i) When company decided not to record the issue of
10% Debentures as Collateral Security.
(ii) When company decided to record the issue of 10% Debentures as Collateral
Security.
Answer:
(i) When company decided not to record the issue of 10%
debentures as Collateral Security
In the books of S. Singh Ltd. Journal |
|||||
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
Bank
A/c |
Dr. |
|
5,00,000 |
|
|
To Bank Loan A/c |
|
|
|
5,00,000 |
|
(Being
bank loan taken from State Bank of India @10% p.a. interest) |
|
|
|
|
(ii)
When company decided to record the issue of 10% debentures as Collateral
Security
In the books of S. Singh Ltd. Journal |
|||||
Date |
Particulars |
|
L.F. |
Debit Amount (`) |
Credit Amount (`) |
|
Bank
A/c |
Dr. |
|
5,00,000 |
|
|
To Bank Loan A/c |
|
|
|
5,00,000 |
|
(Being
bank loan taken from State Bank of India @10% p.a. interest) |
|
|
|
|
|
|
|
|
|
|
|
Debentures
Suspense A/c |
Dr. |
|
7,50,000 |
|
|
To 10% Debentures A/c |
|
|
|
7,50,000 |
|
(Being
7,500, 10% Debentures issued as collateral security) |
|
|
|
|
Page No 9.55:
Question 30:
Journalise
the following:
(a) A debenture issued at `95, repayable at ` 100.
(b) A debenture issued at `95,
repayable at ` 105.
(c) A debenture issued at `95,
repayable at ` 105.
The face value of debenture is ` 100 in each of the above
cases.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
(a) |
Bank
A/c |
Dr. |
|
95 |
|
|
To Debenture
Application A/c |
|
|
95 |
|
|
(Debenture
application money received) |
|
|
|
|
|
|
|
|
|
|
|
Debenture
Application A/c |
Dr. |
|
95 |
|
|
Discount
on Issue of Debentures A/c |
|
|
5 |
|
|
To Debenture A/c |
|
|
100 |
|
|
(Debenture
of Rs 100 each issued at Rs 95 with the term repayable at par) |
|
|
|
|
|
|
|
|
|
|
(b) |
Bank
A/c |
Dr. |
|
95 |
|
|
To Debenture
Application A/c |
|
|
95 |
|
|
(Debenture
application money received) |
|
|
|
|
|
|
|
|
|
|
|
Debenture
Application A/c |
Dr. |
|
95 |
|
|
Discount
on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
Loss
on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
To Debentures A/c |
|
|
100 |
|
|
To Premium on
Redemption A/c |
|
|
5 |
|
|
(Debenture
of Rs 100 each issued of Rs 95 with the term repayable at Rs 105) |
|
|
|
|
|
|
|
|
|
|
(c) |
Bank
A/c |
Dr. |
|
100 |
|
|
To Debenture
Application A/c |
|
|
100 |
|
|
(Debenture
Application received) |
|
|
|
|
|
|
|
|
|
|
|
Debenture
Application A/c |
Dr. |
|
100 |
|
|
Loss
on Issue of Debentures A/c |
Dr. |
|
5 |
|
|
To Debentures A/c |
|
|
100 |
|
|
To Premium on
Redemption A/c |
|
|
5 |
|
|
(Debenture
of Rs 100 each issued at par with the term repayable at Rs 105) |
|
|
|
|
|
|
|
|
|