Volume-2 | Chapter-2 | Question 31 to 35 | Issue of Debentures | Ts grewal solution 2020-21 | Class-12th

Page No 9.55:

Question 31:

Pass journal entries in the following cases:
(a) Rohit Ltd. issued `40,000; 12% Debentures at a premium of 5% redeemable at par.
(b) Virat Ltd. issued `40,000; 12% Debentures at a discount of 10% redeemable at par.
(c) Rahul Ltd. issued `40,000; 12% Debentures at par redeemable at 10% premium.
(d) Prithvi Ltd. issued `40,000; 12% Debentures at a discount of 5%  and redeemable at 5% premium.
(e) Shikhar Ltd. issued `40,000; 12% Debentures at a premium of 10% redeemable at 110%.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(a)	Bank A/c	Dr.		42,000
	To 12% Debenture Application A/c				42,000
	(Debenture application money received)
	12% Debenture Application A/c	Dr.		42,000
	To 12% Debentures A/c				40,000
	To Securities Premium A/c				2,000
	(Debenture application money transferred to 12% Debentures account and securities premium account)

 

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(b)	Bank A/c	Dr.		36,000
	To 12% Debenture Application A/c				36,000
	(Debenture application money received)
	12% Debenture Application A/c	Dr.		36,000
	Discount on Issue of Debentures A/c	Dr.		4,000
	To 12% Debentures A/c				40,000
	(Debentures of Rs 40,000 issued at 10% discount)

 

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
(c)	Bank A/c	Dr.		40,000
	To 12% Debenture Application A/c				40,000
	(Debenture application money received)
	12% Debenture Application A/c	Dr.		40,000
	Loss on Issue of Debentures A/c	Dr.		4,000
	To 12% Debentures A/c				40,000
	To Premium on Redemption A/c				4,000
	(Debentures of Rs 40,000 issued at par with the term repayable at 10% premium)

 

Journal
Date	Particulars				L.F.		Debit Amount Rs		Credit Amount Rs
(d)	Bank A/c		Dr.				38,000
	To 12% Debenture Application A/c								38,000
	(Debenture application money received)
	Debenture Application A/c		Dr.				38,000
	Discount on Issue of Debenture A/c		Dr.				2,000
	Loss on Issue of Debenture A/c		Dr.				2,000
	To 12% Debentures A/c								40,000
	To Premium on Redemption A/c								2,000
	(Debentures of Rs 40,000 issued at 5% discount with the term repayable at 5% premium)
Journal
Date		Particulars				L.F.		Debit Amount Rs		Credit Amount Rs
(e)		Bank A/c		Dr.				44,000
		To 12% Debenture Application A/c								44,000
		(Debenture application money received)
		12% Debenture Application A/c		Dr.				44,000
		Loss on Issue of Debentures A/c		Dr.				4,000
		To 12% Debentures A/c								40,000
		To Securities Premium A/c								4,000
		To Premium on Redemption A/c								4,000
		(Debenture of Rs 40,000 issued at 10% premium with the term payable at 10% premium)

Page No 9.55:

Question 32:

Answer:

 

In the books of ZK Ltd. Journal
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
(e)	Bank A/c	Dr.			3,80,000
	To 9% Debenture Application A/c					3,80,000
	(Debenture application money received at 5% discount)
	9% Debenture Application A/c		Dr.		3,80,000
	Discount on Issue of Debentures A/c		Dr.		20,000
	Loss on Issue of Debentures A/c		Dr.		40,000
	To 9% Debentures A/c					4,00,000
	To Premium on Redemption A/c					40,000
	(Debenture of Rs 4,00,000 issued at 5% Discount with the term payable at 10% premium)

Page No 9.55:

Question 33:

Answer:

In the books of X Ltd. Journal
Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
Bank A/c	Dr.		94,000
To 9% Debenture Application A/c				94,000
(Debenture application money received at 6% discount)
9% Debenture Application A/c	Dr.		94,000
Discount on Issue of Debentures A/c	Dr.		6,000
Loss on Issue of Debentures A/c	Dr.		10,000
To 9% Debentures A/c				1,00,000
To Premium on Redemption A/c				10,000
(Debenture of Rs 1,00,000 issued at 6% Discount with the term payable at 10% premium)

1

Dr.	Discount on Issue of Debentures A/c						Cr.
Date		Particulars	Amount (`)	Date	Particulars	Amount (`)
On the date of Issue		To 9% Debentures A/c	6,000	By the end of Year of allotment	By Statement of Profit & Loss A/c	6,000
			6,000			6,000

 

Page No 9.55:

Question 34:

Pass necessary Journal entries relating to the issue of  debentures for the following:

(a) Issued  ` 28,000; 10% Debentures of  ` 100 each at a premium of 15% redeemable at par.
(b) Issued  ` 30,000; 10% Debentures of  ` 100 each at a premium of 10% and redeemable at a premium of 15%.
(c) Issued  ` 80,000; 10% Debentures of  ` 100 each at par repayable at a premium of 10%.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit  Amount Rs
(a)	Bank A/c (280 debentures × 115)	Dr.		32,200
	To Debenture Application and Allotment A/c				32,200
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		32,200
	To 10% Debentures A/c				28,000
	To Securities Premium Reserve A/c				4,200
	(280; 10% Debentures issued at a premium of 15%)
(b)	Bank A/c	Dr.		33,000
	To Debenture Application and Allotment A/c				33,000
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		33,000
	Loss On Issue of debentures A/c	Dr.		4,500
	To 10% Debentures A/c				30,000
	To Securities Premium Reserve A/c				3,000
	To Premium on Redemption of debentures A/c				4,500
	(300; 10% Debentures issued at a premium of 10% and redeemable at a premium of 15%)
(c)	Bank A/c	Dr.		80,000
	To Debenture Application and Allotment A/c				80,000
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		80,000
	Loss On Issue of debentures A/c	Dr.		8,000
	To 10% Debentures A/c				80,000
	To Premium on Redemption of debentures A/c				8,000
	(800; 10% Debentures issued at par and redeemable at premium of 10%)

 Page No 9.56:

Question 35:

Pass necessary Journal entries for the issue of debentures in the following cases:
(a)  ` 40,000; 12% Debentures of  ` 100 each issued at a premium of 5% redeemable at par.
(b) ` 70,000; 12% Debentures of  ` 100 each issued at a premium of 5% redeemable at ` 110.

Answer:

(a)

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		42,000
	To Debenture Application A/c				42,000
	(400 debentures issued at Rs 100 at a premium of 5%)
	Debenture Application A/c	Dr.		42,000
	To 12% Debenture A/c				40,000
	To Securities Premium A/c				2,000
	(400 debentures issued at a premium of 5% and redeemable at par)

 

(b)

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		73,500
	To Debenture Application A/c				73,500
	(700 debentures issued at Rs 100 at a premium of 5%)
	Debenture Application A/c	Dr.		73,500
	Loss on Issue of Debentures A/c	Dr.		7,000
	To 12% Debenture A/c				70,000
	To Securities Premium A/c				3,500
	To Premium on Redemption A/c				7,000
	(70,000 debentures issued at a premium of 5% and redeemable at Rs 110)

 

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