Volume-2 | Chapter-2 | Question 46 to 48 | Issue of Debentures | Ts grewal solution 2020-21 | Class-12th

Page No 9.57:

Question 46:

On 1st April, 2017, Solar Power Ltd. issued 10,000, 8% Debentures of ` 100 each at a discount of 5% redeemable at a premium of 15% at the end of five years. All the debentures were subscribed and allotment was made. The company had balance in Securities Premium Reserve of ` 80,000.
Prepare the Balance Sheet (extract) as at 31st March, 2018.



Answer:

In the books of Solar Power 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

(1,20,000)

   2. Non-Current Liabilities

 

 

       a. Long-term Borrowings

1

10,00,000

       b. Other long-term Liabilities

2

1,50,000

 Total

 

 

 

 

 

II. Assets

 

 

    Current Assets

 

 

    Cash and Cash Equivalents

4

9,50,000

 

 

 

  Total

 

 

         

Notes to Accounts:

Note
No.

Particulars

Amount
(
`)

1.

Long-term Borrowings

 

 

 

10,000, 8% Debentures of `100 each issued

 

10,00,000

 

 

 

 

2.

Other long-term Liabilities

 

 

 

Premium on Redemption of Debentures

 

1,50,000

 

 

 

 

3.

Reserves and Surplus

 

 

 

Securities Premium Reserve

80,000

 

 

  Less: Loss on Issue of Debentures written off

(80,000)

 

 

Statement of Profit and Loss

 

 

  Less: Loss on Issue of Debentures written off

(1,20,000)

(1,20,000)

 

 

 

 

4.

Cash and Cash Equivalents

 

 

 

On 8% debentures @ ` 95 each (10,000 × 95)

 

9,50,000



Page No 9.57:

Question 47:

On 1st April, 2015. Mathew Ltd. issued 10,000, 9% Debentures of ` 100 each at a discount of 5%, redeemable at a premium of 5%. These debentures were redeemable as follows:
 

On 31st March, 2016

2,000 Debentures;

On 31st March, 2017

5,000 Debentures;

On 31st March, 2018

3,000 Debentures.


Prepare the Loss on Issue of Debentures Account, Debentures Account and Premium on Redemption of Debentures Account for three years.



Answer:

 

In the books of Mathew Ltd.

 

Dr.

Loss on Issue of Debentures A/c

Cr.

Date

Particulars

Amount

(`)

Date

Particulars

Amount

(`)

2015

 

 

2016

 

 

April 01

To 9% Debentures A/c        

1,00,000

March 31

By Statement of Profit & Loss A/c

1,00,000

 

 

 

 

 

 

 

 

1,00,000

 

 

1,00,000

 

 

 

 

 

 

 

Dr.

9% Debentures A/c

Cr.

Date

Particulars

Amount

(`)

Date

Particulars

Amount

(`)

2016

 

 

2015

 

 

March 31

To Debentureholders A/c

2,00,000

April 01

By Debenture Application & Allotment A/c

9,50,000

March 31

To balance c/d

8,00,000

April 01

By Loss on Issue of Debentures A/c

50,000

 

 

 

 

 

 

 

 

10,00,000

 

 

10,00,000

2017

 

 

2016

 

 

March 31

To Debentureholders A/c

5,00,000

April 01

By balance b/d

8,00,000

March 31

To balance c/d

3,00,000

 

 

 

 

 

 

 

 

 

 

 

8,00,000

 

 

8,00,000

2018

 

 

2017

 

 

March 31

To Debentureholders A/c

3,00,000

April 01

By balance b/d

3,00,000

 

 

 

 

 

 

 

 

3,00,000

 

 

3,00,000

 

 

 

 

 

 

 

Dr.

Premium on Redemption of Debentures A/c

Cr.

Date

Particulars

Amount

(`)

Date

Particulars

Amount

(`)

2016

 

 

2015

 

 

March 31

To Debentureholders A/c       

10,000

April 01

By Loss on Issue of Debentures A/c

50,000

March 31

To balance c/d

40,000

 

 

 

 

 

 

 

 

 

 

 

50,000

 

 

50,000

2017

 

 

2016

 

 

March 31

To Debentureholders A/c

25,000

April 01

By balance b/d

40,000

March 31

To balance c/d

15,000

 

 

 

 

 

 

 

 

 

 

 

40,000

 

 

40,000

2018

 

 

2017

 

 

March 31

To Debentureholders A/c

15,000

April 01

By balance b/d

15,000

 

 

 

 

 

 

 

 

15,000

 

 

15,000

 

 

 

 

 

 



Page No 9.57:

Question 48:

Office Products Ltd, issued on 1st April, 2018, 20,000, 9% Debentures of ` 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Pass the necessary Journal entries.



Answer:

In the books of Office Products Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount (`)

Credit Amount (`)

2018

 

 

 

 

 

April 01

Bank A/c

Dr.

 

22,00,000

 

 

   To Debentures Application and Allotment A/c

 

 

 

22,00,000

 

(Being application money received on 20,000 debentures)

 

 

 

 

 

 

 

 

 

 

April 01

Debentures Application and Allotment A/c

Dr.

 

22,00,000

 

 

Loss on Issue of Debentures A/c

Dr.

 

1,00,000

 

 

   To 9% Debentures A/c

 

 

 

20,00,000

 

   To Securities Premium Reserve A/c

 

 

 

2,00,000

 

   To Premium on Redemption of Debentures A/c

 

 

 

1,00,000

 

(Being application and allotment money adjusted and 5% premium on redemption of debentures too)

 

 

 

 

 

 

 

 

 

 

2019

 

 

 

 

 

March 31

Securities Premium Reserve A/c

Dr.

 

1,00,000

 

 

   To Loss on Issue of Debentures A/c

 

 

 

1,00,000

 

(Being loss on issue of debentures written off)

 

 

 

 

 


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