Question 41:
Mercury
limited company issued ` 1,00,000, 9% Debentures at a
discount of 6% on 1st April, 2017. These debentures are to be redeemed equally,
spread over 5 annual installments.
Pass
the Journal entries for issue of debentures and writing off the discount.
Answer:
|
In the books of S. Singh Ltd. Journal |
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|
Date |
Particulars |
|
L.F. |
Debit Amount (`) |
Credit Amount (`) |
|
2017 |
|
|
|
|
|
|
April 01 |
Bank
A/c |
Dr. |
|
94,000 |
|
|
|
To Debentures Application & Allotment A/c |
|
|
|
94,000 |
|
|
(Being
application money received on 9% Debentures issued at 6% discount) |
|
|
|
|
|
|
|
|
|
|
|
|
April 01 |
Debentures
Application & Allotment A/c |
Dr. |
|
94,000 |
|
|
|
Discount
on Issue of Debentures A/c |
Dr. |
|
6,000 |
|
|
|
To 9% Debentures A/c |
|
|
|
1,00,000 |
|
|
(Being
application & allotment money adjusted) |
|
|
|
|
|
2018 |
|
|
|
|
|
|
March 31 |
Statement
of Profit & Loss A/c |
Dr. |
|
6,000 |
|
|
|
To Discount on Issue of Debentures A/c |
|
|
|
6,000 |
|
|
(Being
discount on issue of debentures written off) |
|
|
|
|
Page No 9.56:
Question 42:
On
1st January, 2017, Raha Ltd. issued 6,000, 8%
Debentures of nominal (face) value of ` 100 each
redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years.
It has a balance of ` 10,000 in Securities Premium Reserve.
Pass Journal entries. Also give Journal entries for writing off Loss on Issue
of Debentures.
Answer:
|
In the books of Raha Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2017 |
|
|
|
|
|
|
January 01 |
Bank
A/c (6,000 × 100) |
Dr. |
|
6,00,000 |
|
|
|
To Debentures Application & Allotment A/c (6,000 × 100) |
|
|
|
6,00,000 |
|
|
(Being
application money received on 8% Debentures issued) |
|
|
|
|
|
|
|
|
|
|
|
|
January 01 |
Debentures
Application & Allotment A/c |
Dr. |
|
6,00,000 |
|
|
|
Loss
on Issue of Debentures A/c |
Dr. |
|
30,000 |
|
|
|
To 8% Debentures A/c |
|
|
|
6,00,000 |
|
|
To Premium on Redemption of Debentures A/c |
|
|
|
30,000 |
|
|
(Being
application & allotment money adjusted along with 5% |
|
|
|
|
|
|
premium
payable on redemption) |
|
|
|
|
|
2017 |
|
|
|
|
|
|
December
31 |
Securities
Premium Reserve A/c |
Dr. |
|
10,000 |
|
|
|
Statement
of Profit & Loss A/c |
Dr. |
|
20,000 |
|
|
|
To Loss on Issue of Debentures A/c |
|
|
|
30,000 |
|
|
(Being
loss on issue of debentures written off) |
|
|
|
|
Page No 9.56:
Question 43:
Global
Ltd. issued 10,000, 8% Debentures of ` 100 each redeemable in four
equal instalments by draw of lots from the end of 3
years at a premium of ` 9.
Pass the Journal entries for writing off the Loss on Issue of Debentures. Also
prepare Loss on issue of Debentures Account.
Answer:
|
In the books of Raha Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
By the end of year of Allotment |
Statement
of Profit & Loss A/c |
Dr. |
|
90,000 |
|
|
To Loss on Issue of Debentures A/c |
|
|
|
90,000 |
|
|
(Being
loss on issue of debentures written off) |
|
|
|
|
|
|
Dr. |
Loss on Issue of Debentures A/c |
Cr. |
|||||
|
Date |
Particulars |
Amount (`) |
Date |
Particulars |
Amount (`) |
||
|
On
the date of Issue |
To
8% Debentures A/c |
90,000 |
By
the end of Year of allotment |
By
Statement of Profit & Loss A/c |
90,000 |
||
|
|
|
|
|
|
|
||
|
|
|
90,000 |
|
|
90,000 |
||
|
|
|
|
|
|
|
||
Page
No 9.57:
Question
44:
Answer:
|
In the books of Garvit
Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2018 |
|
|
|
|
|
|
April 01 |
Bank
A/c (3,600 × 94) |
Dr. |
|
3,38,400 |
|
|
|
To Debentures Application & Allotment A/c
(3,600 × 94) |
|
|
|
3,38,400 |
|
|
(Being
application money received on 11% Debentures issued at 6%) |
|
|
|
|
|
|
|
|
|
|
|
|
April 01 |
Debentures
Application & Allotment A/c |
Dr. |
|
3,38,400 |
|
|
|
Discount
on Issue of Debentures A/c (3,000×4) |
Dr. |
|
18,000 |
|
|
|
To 11% Debentures A/c (3,000×100) |
|
|
|
3,00,000 |
|
To Bank A/c (600×94) |
56,400 |
||||
|
|
(Being
application & allotment money adjusted) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31
March 19 |
Securities
Premium Reserve A/c |
Dr. |
|
10,000 |
|
|
|
Statement
of Profit & Loss A/c |
Dr. |
20,000 |
|
|
|
|
To Loss on Issue of Debentures A/c |
|
|
|
30,000 |
|
|
(Being
loss on issue of debentures written off) |
|
|
|
|
Page No 9.57:
Question 45:
On
1st June, 2017, R Energy Ltd. issued 10,000, 7% Debentures of ` 100
each at a discount of 10% redeemable at a premium of 10% at the end of five
years. All the debentures were subscribed and allotment was made.
Prepare
the Balance Sheet (extract) as at 31st March, 2018.
Answer:
|
In the books of R Energy Ltd. An Extract of Balance Sheet As at 31st March, 2018 |
|||||
|
Particulars |
Note No. |
Amount |
|||
|
I. EQUITIES AND LIABILITIES |
|
|
|||
|
1. Shareholders’ Funds |
|
|
|||
|
Reserves and Surplus |
3 |
(2,00,000) |
|||
|
2. Non-Current Liabilities |
|
|
|||
|
a. Long-term Borrowings |
1 |
10,00,000 |
|||
|
b. Other long-term Liabilities |
2 |
1,00,000 |
|||
|
|
|
|
|||
|
Total |
|
9,00,000 |
|||
|
|
|
|
|||
|
II. Assets |
|
|
|||
|
Current Assets |
|
|
|||
|
Cash and Cash Equivalents |
4 |
9,00,000 |
|||
|
|
|
|
|||
|
Total |
|
9,00,000 |
|||
|
Notes to Accounts: |
|||||
|
Note |
Particulars |
|
Amount (`) |
||
|
1. |
Long-term Borrowings |
|
|
||
|
|
10,000,
7% Debentures of `100 each issued at |
|
10,00,000 |
||
|
|
|
|
|
||
|
2. |
Other long-term Liabilities |
|
|
||
|
|
Premium
on Redemption of Debentures |
|
1,00,000 |
||
|
|
|
|
|
||
|
3. |
Reserves and Surplus |
|
|
||
|
|
Statement
of Profit & Loss |
|
|
||
|
|
Less: Loss on Issue of Debentures
written off |
(2,00,000) |
(2,00,000) |
||
|
|
|
|
|
||
|
4. |
Cash and Cash Equivalents |
|
|||
|
|
On
7% debentures @ ` 90 each
(10,000 × 90) |
9,00,000 |
|||