X Ltd. obtained a loan of Rs 6,00,000, from IDBI bank. The company issued 7000, 9% debentures of Rs100 each as collateral security for the same. Show how these items will be presented in the Balance Sheet of the company.
Hi Vijayata
If issue of debentures as collateral security are to be recorded as a journal entry in the books, then the following journal entry will be passed:
The Balance Sheet will look like:
If issue of debentures as collateral security are to be recorded as a journal entry in the books, then the following journal entry will be passed:
| Debentures Suspense A/c | Dr. | 7,00,000 | |
| To 9% Debentures A/c (7000 100) | 7,00,000 |
The Balance Sheet will look like:
| Balance Sheet | ||
| Particulars | Note No. | Amount |
| I. Equity and Liabilities | ||
| 1. Shareholders’ Funds | ||
| 2. Non-Current Liabilities | ||
| a. Long-term Borrowings | 1 | 6,00,000 |
| Total | 6,00,000 | |
| II. Assets | ||
| 1. Non-Current Assets | ||
| 2. Current Assets | ||
| a. Cash & Cash Equivalents | 2 | 6,00,000 |
| Total | 6,00,000 | |
| Notes to Accounts | |||
| Note | Particulars | Amount | |
| 1 | Long-Term Borrowings | ||
| Bank Loan | 6,00,000 | ||
| 9% Debentures (Secured against Loan) | 7,00,000 | ||
| Less: Debenture Suspense A/c | 7,00,000 | ||
| 2 | Cash & Cash Equivalents | ||
| Bank | 6,00,000 | ||