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Page No 8.39:

Question 1:

Answer:

Books of Vishwas Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

50,000

 

 

To 9% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 2,000 debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

50,000

 

 

To 9% Debenture A/c

 

 

50,000

 

(Debenture application money transferred to 9% Debentures A/c)

 

 

 

 

 

 

 

 

 

9% Debenture Allotment A/c

Dr.

 

50,000

 

 

To 9% Debentures A/c

 

 

50,000

 

(Debenture allotment money due on 2,000 Debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

50,000

 

 

To 9% Debenture Allotment A/c

 

 

50,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

9% Debenture First and Final Call A/c

Dr.

 

1,00,000

 

 

To 9% Debentures A/c

 

 

1,00,000

 

(Debenture first and final call money due on 2,000 debentures at Rs 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,00,000

 

 

To 9% Debenture First and Final Call A/c

 

 

1,00,000

 

(Debenture first and final call received)

 

 

 

 

Page No 8.39:

Question 2:

Books of Vishwas Ltd.

Journal

Date

Particulars

 

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

50,000

 

 

To 9% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 2,000 debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

50,000

 

 

To 9% Debenture A/c

 

 

50,000

 

(Debenture application money transferred to 9% Debentures A/c)

 

 

 

 

 

 

 

 

 

9% Debenture Allotment A/c

Dr.

 

50,000

 

 

To 9% Debentures A/c

 

 

50,000

 

(Debenture allotment money due on 2,000 Debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

50,000

 

 

To 9% Debenture Allotment A/c

 

 

50,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

9% Debenture First and Final Call A/c

Dr.

 

1,00,000

 

 

To 9% Debentures A/c

 

 

1,00,000

 

(Debenture first and final call money due on 2,000 debentures at Rs 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,00,000

 

 

To 9% Debenture First and Final Call A/c

 

 

1,00,000

 

(Debenture first and final call received)

 

 

 

 

Answer:

 

In the Books of Narain Laxmi Ltd.

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c (10,000 debentures × 135)

Dr.

 

13,50,000

 

 

To Debenture Application and Allotment A/c

 

 

 

13,50,000

 

(Application money received on 10,000 12% debenture)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

13,50,000

 

 

To 12% Debentures A/c

 

 

 

7,50,000

 

To Securities Premium Reserve A/c

 

 

 

2,62,500

 

To Bank A/c

 

 

 

3,37,500

 

(7,500; 12% Debentures of Rs 100 each issued at a premium of Rs 35 and excess money refunded)

 

 

 

 

 

 

 

 

 

             

 



Page No 8.40:

Question 3:

 

In the Books of Narain Laxmi Ltd.

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c (10,000 debentures × 135)

Dr.

 

13,50,000

 

 

To Debenture Application and Allotment A/c

 

 

 

13,50,000

 

(Application money received on 10,000 12% debenture)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

13,50,000

 

 

To 12% Debentures A/c

 

 

 

7,50,000

 

To Securities Premium Reserve A/c

 

 

 

2,62,500

 

To Bank A/c

 

 

 

3,37,500

 

(7,500; 12% Debentures of Rs 100 each issued at a premium of Rs 35 and excess money refunded)

 

 

 

 

 

 

 

 

 

             

 

Answer:

Books of Raa Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

50,000

 

 

To 8% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 5,000 debentures at Rs 10 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

50,000

 

 

To 8% Debentures A/c

 

 

50,000

 

(Debenture application money transferred to 8% Debentures A/c)

 

 

 

 

 

 

 

 

 

8% Debenture Allotment A/c

Dr.

 

1,25,000

 

 

To 8% Debentures A/c

 

 

1,00,000

 

To Securities Premium A/c

 

 

25,000

 

(Debenture allotment due on 5,000 8% Debentures at Rs 25 including premium of Rs 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,25,000

 

 

To 8% Debentures Allotment A/c

 

 

1,25,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

8% Debentures First and Final Call A/c

Dr.

 

3,50,000

 

 

To 8% Debenture A/c

 

 

3,50,000

 

(Debenture first and final call due on 5,000 Debentures at Rs 70 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,50,000

 

 

To 8% Debenture First and Final Call A/c

 

 

3,50,000

 

(Debenture first and final call received)

 

 

 

 

 

 

 

 

 

Page No 8.40:

Question 4:

Books of Raa Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

50,000

 

 

To 8% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 5,000 debentures at Rs 10 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

50,000

 

 

To 8% Debentures A/c

 

 

50,000

 

(Debenture application money transferred to 8% Debentures A/c)

 

 

 

 

 

 

 

 

 

8% Debenture Allotment A/c

Dr.

 

1,25,000

 

 

To 8% Debentures A/c

 

 

1,00,000

 

To Securities Premium A/c

 

 

25,000

 

(Debenture allotment due on 5,000 8% Debentures at Rs 25 including premium of Rs 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,25,000

 

 

To 8% Debentures Allotment A/c

 

 

1,25,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

8% Debentures First and Final Call A/c

Dr.

 

3,50,000

 

 

To 8% Debenture A/c

 

 

3,50,000

 

(Debenture first and final call due on 5,000 Debentures at Rs 70 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,50,000

 

 

To 8% Debenture First and Final Call A/c

 

 

3,50,000

 

(Debenture first and final call received)

 

 

 

 

 

 

 

 

 

Answer:

Face Value of Debenture = Rs 100

Discount (Rs 100 × 5%) = Rs 5

∴ Issue Price = Rs 95

Amount Payable as:

On Application (25%)

Rs 25 per debenture

On Allotment (20%)

Rs 20 (25 – 5) per debenture

On First and Final Call (50%)

Rs 50 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

3,00,000

 

 

To 8% Debenture Application A/c

 

 

3,00,000

 

(Application money received for 12,000 8% Debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

3,00,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Debenture application money transferred to 8% Debentures account)

 

 

 

 

 

 

 

 

 

8% Debentures Allotment A/c

Dr.

 

2,40,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

60,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Allotment money due on 12,000 8% Debentures at Rs 20 each at discount of Rs 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

To 8% Debenture Allotment A/c

 

 

2,40,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c

Dr.

 

6,00,000

 

 

To 8% Debentures A/c

 

 

6,00,000

 

(First and final call money due on 12,000 8% Debentures at Rs 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,00,000

 

 

To 8% Debentures First and Final Call A/c

 

 

6,00,000

 

(First and Final call money received)

 

 

 

 

 

 

 

 

 

Page No 8.40:

Question 5:

Face Value of Debenture = Rs 100

Discount (Rs 100 × 5%) = Rs 5

∴ Issue Price = Rs 95

Amount Payable as:

On Application (25%)

Rs 25 per debenture

On Allotment (20%)

Rs 20 (25 – 5) per debenture

On First and Final Call (50%)

Rs 50 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

3,00,000

 

 

To 8% Debenture Application A/c

 

 

3,00,000

 

(Application money received for 12,000 8% Debentures at Rs 25 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

3,00,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Debenture application money transferred to 8% Debentures account)

 

 

 

 

 

 

 

 

 

8% Debentures Allotment A/c

Dr.

 

2,40,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

60,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Allotment money due on 12,000 8% Debentures at Rs 20 each at discount of Rs 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

To 8% Debenture Allotment A/c

 

 

2,40,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c

Dr.

 

6,00,000

 

 

To 8% Debentures A/c

 

 

6,00,000

 

(First and final call money due on 12,000 8% Debentures at Rs 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,00,000

 

 

To 8% Debentures First and Final Call A/c

 

 

6,00,000

 

(First and Final call money received)

 

 

 

 

 

 

 

 

 

Answer:

Face Value of Debenture = Rs 100

Premium (Rs 100 × 10%) = Rs 10

∴ Issue Price = Rs 110

Amount Payable as:

On Application (25%)

Rs 25 including premium of Rs 10 (i.e. Rs 10 + 15)

On Allotment (85%)

Rs 85 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Debenture Application A/c

Dr.

 

2,50,000

 

 

To Debentures A/c

 

 

1,50,000

 

To Securities Premium A/c

 

 

1,00,000

 

(Debenture application money received for 10,000 debentures at Rs 25 including premium of Rs10 each transferred to debenture account)

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c

Dr.

 

8,50,000

 

 

To Debentures A/c

 

 

8,50,000

 

(Debentures allotment due on 10,000 Debentures at Rs 85 each)

 

 

 

 

 

 

 

 

 

 

Cash Book

Dr.

 

Cr.

Date

Particulars

L.F.

Bank

Rs

Date

Particulars

L.F.

Bank

Rs

 

Debenture Application

 

2,50,000

 

 

 

 

 

Debenture Allotment

 

8,50,000

 

 

 

 

 

 

 

 

 

Balance c/d

 

11,00,000

 

 

 

11,00,000

 

 

 

11,00,000

 

 

 

 

 

 

 

 

 

Page No 8.40:

Question 6:

Face Value of Debenture = Rs 100

Premium (Rs 100 × 10%) = Rs 10

∴ Issue Price = Rs 110

Amount Payable as:

On Application (25%)

Rs 25 including premium of Rs 10 (i.e. Rs 10 + 15)

On Allotment (85%)

Rs 85 per debenture

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Debenture Application A/c

Dr.

 

2,50,000

 

 

To Debentures A/c

 

 

1,50,000

 

To Securities Premium A/c

 

 

1,00,000

 

(Debenture application money received for 10,000 debentures at Rs 25 including premium of Rs10 each transferred to debenture account)

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c

Dr.

 

8,50,000

 

 

To Debentures A/c

 

 

8,50,000

 

(Debentures allotment due on 10,000 Debentures at Rs 85 each)

 

 

 

 

 

 

 

 

 

 

Cash Book

Dr.

 

Cr.

Date

Particulars

L.F.

Bank

Rs

Date

Particulars

L.F.

Bank

Rs

 

Debenture Application

 

2,50,000

 

 

 

 

 

Debenture Allotment

 

8,50,000

 

 

 

 

 

 

 

 

 

Balance c/d

 

11,00,000

 

 

 

11,00,000

 

 

 

11,00,000

 

 

 

 

 

 

 

 

 

Answer:

Books of A Ltd.

Journal

Date

Particular

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

48,000

 

 

To 9% Debenture Application A/c

 

 

48,000

 

(Debenture application money received for 2,400 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

48,000

 

 

To 9% Debentures A/c

 

 

40,000

 

To 9% Debentures Allotment A/c

 

 

4,000

 

To Bank A/c

 

 

4,000

 

(Debenture application money transferred to 9% Debenture account for 2,000 Debenture, adjusted to Debenture Allotment account for 200 Debentures and money refunded for 200 debentures)

 

 

 

 

 

 

 

 

 

9% Debenture Allotment A/c

Dr.

 

40,000

 

 

To 9% Debentures A/c

 

 

40,000

 

(Debenture allotment money due on 2,000 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

36,000

 

 

To 9% Debentures Allotment A/c

 

 

36,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

Debenture First Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debenture first call money due on 2,000 9% debenture at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture First Call A/c

 

 

60,000

 

(Debenture first call money received)

 

 

 

 

 

 

 

 

 

Debenture Final Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debentures final call money due on 2,000 9% Debentures at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture Final Call A/c

 

 

60,000

 

(Debenture final call received on 2,000 9% Debenture at Rs 30 each)

 

 

 

 

 

 

 

 

 

Page No 8.40:

Question 7:

Books of A Ltd.

Journal

Date

Particular

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

48,000

 

 

To 9% Debenture Application A/c

 

 

48,000

 

(Debenture application money received for 2,400 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

48,000

 

 

To 9% Debentures A/c

 

 

40,000

 

To 9% Debentures Allotment A/c

 

 

4,000

 

To Bank A/c

 

 

4,000

 

(Debenture application money transferred to 9% Debenture account for 2,000 Debenture, adjusted to Debenture Allotment account for 200 Debentures and money refunded for 200 debentures)

 

 

 

 

 

 

 

 

 

9% Debenture Allotment A/c

Dr.

 

40,000

 

 

To 9% Debentures A/c

 

 

40,000

 

(Debenture allotment money due on 2,000 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

36,000

 

 

To 9% Debentures Allotment A/c

 

 

36,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

Debenture First Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debenture first call money due on 2,000 9% debenture at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture First Call A/c

 

 

60,000

 

(Debenture first call money received)

 

 

 

 

 

 

 

 

 

Debenture Final Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debentures final call money due on 2,000 9% Debentures at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture Final Call A/c

 

 

60,000

 

(Debenture final call received on 2,000 9% Debenture at Rs 30 each)

 

 

 

 

 

 

 

 

 

Answer:

In the Books of Vijay Laxmi Ltd.

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

22,95,000

 

 

To Debenture Application and Allotment A/c

 

 

 

22,95,000

 

(Application money received on 13,500 12% debenture)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

22,95,000

 

 

To 12% Debentures A/c

 

 

 

10,00,000

 

To Securities Premium Reserve A/c

 

 

 

7,00,000

 

To Bank A/c

 

 

 

5,95,000

 

(10,000; 12% Debentures issued at a premium of Rs 70 and excess money refunded)

 

 

 

 

 

 

 

 

             

 

Page No 8.40:

Question 8:

In the Books of Vijay Laxmi Ltd.

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

22,95,000

 

 

To Debenture Application and Allotment A/c

 

 

 

22,95,000

 

(Application money received on 13,500 12% debenture)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

22,95,000

 

 

To 12% Debentures A/c

 

 

 

10,00,000

 

To Securities Premium Reserve A/c

 

 

 

7,00,000

 

To Bank A/c

 

 

 

5,95,000

 

(10,000; 12% Debentures issued at a premium of Rs 70 and excess money refunded)

 

 

 

 

 

 

 

 

             

 

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Building A/c

Dr.

 

9,00,000

 

 

To Vendor A/c

 

 

9,00,000

 

(Building purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

1,00,000

 

 

To Debentures A/c

 

 

10,00,000

 

(Issued 10,000 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.40:

Question 9:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Building A/c

Dr.

 

9,00,000

 

 

To Vendor A/c

 

 

9,00,000

 

(Building purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

1,00,000

 

 

To Debentures A/c

 

 

10,00,000

 

(Issued 10,000 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Wye Ltd.   

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Sundry Assets A/c

Dr.

 

2,00,000

 

 

To Vendor A/c

 

 

2,00,000

 

(Business purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

65,000

 

 

To Cash A/c

 

 

65,000

 

(Amount paid to Vendor in cash)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debentures A/c

 

 

1,50,000

 

(Issued 1,500 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.40:

Question 10:

Books of Wye Ltd.   

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Sundry Assets A/c

Dr.

 

2,00,000

 

 

To Vendor A/c

 

 

2,00,000

 

(Business purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

65,000

 

 

To Cash A/c

 

 

65,000

 

(Amount paid to Vendor in cash)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debentures A/c

 

 

1,50,000

 

(Issued 1,500 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Newton Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

5,76,000

 

 

To B

 

 

5,76,000

 

(Machinery purchased from B)

 

 

 

 

 

 

 

 

 

B

Dr.

 

5,76,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

24,000

 

 

To 9% Debenture A/c

 

 

6,00,000

 

(Issued 6,000 debentures at 4% discount)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.40:

Question 11:

Books of Newton Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

5,76,000

 

 

To B

 

 

5,76,000

 

(Machinery purchased from B)

 

 

 

 

 

 

 

 

 

B

Dr.

 

5,76,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

24,000

 

 

To 9% Debenture A/c

 

 

6,00,000

 

(Issued 6,000 debentures at 4% discount)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Case 1

Books of Reliance Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

1,35,000

 

 

To Vendor A/c

 

 

1,35,000

 

(Machinery Purchases)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

To 9% Debenture A/c

 

 

1,35,000

 

(Issued 1,350 debentures at par)

 

 

 

 

 

 

 

 

Working Note:

Case 2

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

1,35,000

 

 

To Vendor A/c

 

 

1,35,000

 

(Machinery purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debenture A/c

 

 

1,50,000

 

(Issued 1,500 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.40:

Question 12:

Case 1

Books of Reliance Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

1,35,000

 

 

To Vendor A/c

 

 

1,35,000

 

(Machinery Purchases)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

To 9% Debenture A/c

 

 

1,35,000

 

(Issued 1,350 debentures at par)

 

 

 

 

 

 

 

 

Working Note:

Case 2

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

1,35,000

 

 

To Vendor A/c

 

 

1,35,000

 

(Machinery purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,35,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debenture A/c

 

 

1,50,000

 

(Issued 1,500 debentures at 10% discount)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Deepak Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Furniture A/c

Dr.

 

2,20,000

 

 

To Furniture Mart

 

 

2,20,000

 

(Furniture purchased from Furniture Mart)

 

 

 

 

 

 

 

 

 

Furniture Mart

Dr.

 

1,10,000

 

 

To Bills Payable A/c

 

 

1,10,000

 

(Bill accepted from Furniture Mart against 50% payment)

 

 

 

 

 

 

 

 

 

Furniture Mart

Dr.

 

1,10,000

 

 

To 9% Debenture A/c

 

 

1,00,000

 

To Securities Premium A/c

 

 

10,000

 

(Issued 1,000 9% Debentures of Rs 100 each at a premium of 10% to Furniture Mart)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.40:

Question 13:

Books of Deepak Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Furniture A/c

Dr.

 

2,20,000

 

 

To Furniture Mart

 

 

2,20,000

 

(Furniture purchased from Furniture Mart)

 

 

 

 

 

 

 

 

 

Furniture Mart

Dr.

 

1,10,000

 

 

To Bills Payable A/c

 

 

1,10,000

 

(Bill accepted from Furniture Mart against 50% payment)

 

 

 

 

 

 

 

 

 

Furniture Mart

Dr.

 

1,10,000

 

 

To 9% Debenture A/c

 

 

1,00,000

 

To Securities Premium A/c

 

 

10,000

 

(Issued 1,000 9% Debentures of Rs 100 each at a premium of 10% to Furniture Mart)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Lotus Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

2,50,000

 

 

Goodwill A/c (balancing figure)

Dr.

 

1,10,000

 

 

To Sundry Liabilities A/c

 

 

30,000

 

To Goneby Company A/c

 

 

3,30,000

 

(Business purchased of Goneby Company)

 

 

 

 

 

 

 

 

 

Goneby Company  A/c

Dr.

 

3,30,000

 

 

To Debenture A/c

 

 

3,00,000

 

To Securities Premium A/c

 

 

30,000

 

(Issued 3,000 debentures at 10% premium)

 

 

 

 

 

 

 

 

Working Note:



Page No 8.41:

Question 14:

Books of Lotus Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

2,50,000

 

 

Goodwill A/c (balancing figure)

Dr.

 

1,10,000

 

 

To Sundry Liabilities A/c

 

 

30,000

 

To Goneby Company A/c

 

 

3,30,000

 

(Business purchased of Goneby Company)

 

 

 

 

 

 

 

 

 

Goneby Company  A/c

Dr.

 

3,30,000

 

 

To Debenture A/c

 

 

3,00,000

 

To Securities Premium A/c

 

 

30,000

 

(Issued 3,000 debentures at 10% premium)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

4,00,000

 

 

Goodwill A/c (balancing figure)

Dr.

 

30,000

 

 

To Liabilities A/c

 

 

50,000

 

To Mohan Bros. A/c

 

 

3,80,000

 

(Asset and liabilities purchased from Mohan Bros.)

 

 

 

 

 

 

 

 

 

Case 1 When Debentures are issued at Par

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

To Debenture A/c

 

 

3,80,000

 

(Issued 3,800 debentures at par)

 

 

 

 

 

 

 

 

Working Note:

Case 2 When Debentures are issued at 10% discount

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

Discount on issue of Debenture A/c

Dr.

 

42,220

 

 

To Debenture A/c

 

 

4,22,200

 

To Bank A/c

 

 

20

 

(Issued 4,222 Debentures of Rs 100 each at 10% discount to Mohan Bros. and fraction of debentures is paid in cash)

 

 

 

 

 

 

 

 

 

Working Note:

 

Case 3 When Debentures are issued at 10% premium

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

To Debenture A/c

 

 

3,45,400

 

To Securities Premium A/c

 

 

34,540

 

To Bank A/c

 

 

60

 

(Issued 3,454 Debentures of Rs 100 each at 10% premium to Mohan Bros. and fraction of debentures is paid in cash)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.41:

Question 15:

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

4,00,000

 

 

Goodwill A/c (balancing figure)

Dr.

 

30,000

 

 

To Liabilities A/c

 

 

50,000

 

To Mohan Bros. A/c

 

 

3,80,000

 

(Asset and liabilities purchased from Mohan Bros.)

 

 

 

 

 

 

 

 

 

Case 1 When Debentures are issued at Par

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

To Debenture A/c

 

 

3,80,000

 

(Issued 3,800 debentures at par)

 

 

 

 

 

 

 

 

Working Note:

Case 2 When Debentures are issued at 10% discount

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

Discount on issue of Debenture A/c

Dr.

 

42,220

 

 

To Debenture A/c

 

 

4,22,200

 

To Bank A/c

 

 

20

 

(Issued 4,222 Debentures of Rs 100 each at 10% discount to Mohan Bros. and fraction of debentures is paid in cash)

 

 

 

 

 

 

 

 

 

Working Note:

 

Case 3 When Debentures are issued at 10% premium

 

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Mohan Bros.

Dr.

 

3,80,000

 

 

To Debenture A/c

 

 

3,45,400

 

To Securities Premium A/c

 

 

34,540

 

To Bank A/c

 

 

60

 

(Issued 3,454 Debentures of Rs 100 each at 10% premium to Mohan Bros. and fraction of debentures is paid in cash)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of R Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

5,00,000

 

 

To Liabilities A/c

 

 

2,00,000

 

To S Ltd.

 

 

2,80,000

 

To Capital Reserve A/c (balancing figure)

 

 

20,000

 

(Asset purchased and liabilities took over from S Ltd.)

 

 

 

 

 

 

 

 

 

S Ltd.

Dr.

 

2,80,000

 

 

To 9% Debentures A/c

 

 

2,80,000

 

(Issued 2,800 9% Debentures of Rs 100 each)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.41:

Question 16:

Books of R Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

5,00,000

 

 

To Liabilities A/c

 

 

2,00,000

 

To S Ltd.

 

 

2,80,000

 

To Capital Reserve A/c (balancing figure)

 

 

20,000

 

(Asset purchased and liabilities took over from S Ltd.)

 

 

 

 

 

 

 

 

 

S Ltd.

Dr.

 

2,80,000

 

 

To 9% Debentures A/c

 

 

2,80,000

 

(Issued 2,800 9% Debentures of Rs 100 each)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Romi Ltd.

Journal

Date

Particular

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

20,00,000

 

 

To Creditors A/c

 

 

2,00,000

 

To Kapil Enterprises

 

 

18,00,000

 

(Asset purchased and Creditors took over from Kapil Enterprises)

 

 

 

 

 

 

 

 

 

Kapil Enterprises A/c

Dr.

 

18,00,000

 

 

To 8% Debentures A/c

 

 

14,40,000

 

To Securities Premium A/c

 

 

3,60,000

 

(Issued 14,400 8% Debentures of Rs 100 each at a premium of 25% to Kapil Enterprises)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.41:

Question 17:

Books of Romi Ltd.

Journal

Date

Particular

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

20,00,000

 

 

To Creditors A/c

 

 

2,00,000

 

To Kapil Enterprises

 

 

18,00,000

 

(Asset purchased and Creditors took over from Kapil Enterprises)

 

 

 

 

 

 

 

 

 

Kapil Enterprises A/c

Dr.

 

18,00,000

 

 

To 8% Debentures A/c

 

 

14,40,000

 

To Securities Premium A/c

 

 

3,60,000

 

(Issued 14,400 8% Debentures of Rs 100 each at a premium of 25% to Kapil Enterprises)

 

 

 

 

 

 

 

 

Working Note:

Answer:

Books of Romi Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

20,00,000

 

 

To Creditors A/c

 

 

2,00,000

 

To Kapil Enterprises

 

 

18,00,000

 

(Assets purchased and Creditors took over from Kapil Enterprises)

 

 

 

 

 

 

 

 

 

Kapil Enterprises

Dr.

 

18,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

2,00,000

 

 

To 8% Debentures A/c

 

 

20,00,000

 

(Issued 20,000 8% Debentures of Rs 100 each at discount of 10% to Kapil Enterprises)

 

 

 

 

 

 

 

 

Working Note:

Page No 8.41:

Question 18:

Books of Romi Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Assets A/c

Dr.

 

20,00,000

 

 

To Creditors A/c

 

 

2,00,000

 

To Kapil Enterprises

 

 

18,00,000

 

(Assets purchased and Creditors took over from Kapil Enterprises)

 

 

 

 

 

 

 

 

 

Kapil Enterprises

Dr.

 

18,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

2,00,000

 

 

To 8% Debentures A/c

 

 

20,00,000

 

(Issued 20,000 8% Debentures of Rs 100 each at discount of 10% to Kapil Enterprises)

 

 

 

 

 

 

 

 

Working Note:

Answer:

As per the Revised Schedule VI of the Companies Act, the Company’s Balance Sheet is as follows.

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 8.41:

Question 19:

As per the Revised Schedule VI of the Companies Act, the Company’s Balance Sheet is as follows.

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

 

 

 

 

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 Mahavir 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 Mahavir 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 Mahavir Bank Ltd.

 

 

4,00,000

 

(Loan taken from Mahavir 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 Mahavir 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 8.41:

Question 20:

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 Mahavir 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 Mahavir 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 Mahavir Bank Ltd.

 

 

4,00,000

 

(Loan taken from Mahavir 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 Mahavir 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

 

 

 

 

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 8.41:

Question 21:

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

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

Page No 8.41:

Question 22:

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)

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 



Page No 8.42:

Question 23:

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)

 

 

 

 

 

 

 

 

 

Answer:

Books of Footfall Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

9,00,000

 

 

To Debenture Application A/c

 

 

9,00,000

 

(Debenture application money received for 10,000 debentures at Rs 90 each)

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

Loss on issue of Debentures A/c

Dr.

 

50,000

 

 

To Debentures A/c

 

 

10,00,000

 

To Premium on Redemption A/c

 

 

50,000

 

(10,000 Debentures of Rs 100 each issued at 10% discount with the term repayable at 5% redemption)

 

 

 

 

 

 

 

 

 

Debentures A/c

Dr.

 

10,00,000

 

 

Premium on Redemption A/c

Dr.

 

50,000

 

 

To Debentureholders’ A/c

 

 

10,50,000

 

(Debentures due for redemption along with premium on redemption)

 

 

 

 

 

 

 

 

 

Debentureholders’ A/c

Dr.

 

10,50,000

 

 

To Bank A/c

 

 

10,50,000

 

(Amount due for redemption paid to debenture holders)

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 24:

Books of Footfall Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

9,00,000

 

 

To Debenture Application A/c

 

 

9,00,000

 

(Debenture application money received for 10,000 debentures at Rs 90 each)

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

Loss on issue of Debentures A/c

Dr.

 

50,000

 

 

To Debentures A/c

 

 

10,00,000

 

To Premium on Redemption A/c

 

 

50,000

 

(10,000 Debentures of Rs 100 each issued at 10% discount with the term repayable at 5% redemption)

 

 

 

 

 

 

 

 

 

Debentures A/c

Dr.

 

10,00,000

 

 

Premium on Redemption A/c

Dr.

 

50,000

 

 

To Debentureholders’ A/c

 

 

10,50,000

 

(Debentures due for redemption along with premium on redemption)

 

 

 

 

 

 

 

 

 

Debentureholders’ A/c

Dr.

 

10,50,000

 

 

To Bank A/c

 

 

10,50,000

 

(Amount due for redemption paid to debenture holders)

 

 

 

 

 

 

 

 

 

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

9,00,000

 

 

To Debenture Application A/c

 

 

9,00,000

 

(Debenture application money received for 10,000 debentures at Rs 90 each)

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

To Debentures A/c

 

 

10,00,000

 

To Premium on Redemption A/c

 

 

1,00,000

 

(10,000 Debenture of Rs 100 each issued at 10% discount with the term repayable at a premium of 10%)

 

 

 

 

 

 

 

 

 

Debentures A/c

Dr.

 

10,00,000

 

 

Premium on Redemption A/c

Dr.

 

1,00,000

 

 

To Debentureholders’ A/c

 

 

11,00,000

 

(Amount of Debentures due for redemption along with premium on redemption)

 

 

 

 

 

 

 

 

 

Debentureholders’ A/c

Dr.

 

11,00,000

 

 

To Bank A/c

 

 

11,00,000

 

(Amount due for redemption paid to debenture holders)

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 25:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

9,00,000

 

 

To Debenture Application A/c

 

 

9,00,000

 

(Debenture application money received for 10,000 debentures at Rs 90 each)

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

1,00,000

 

 

To Debentures A/c

 

 

10,00,000

 

To Premium on Redemption A/c

 

 

1,00,000

 

(10,000 Debenture of Rs 100 each issued at 10% discount with the term repayable at a premium of 10%)

 

 

 

 

 

 

 

 

 

Debentures A/c

Dr.

 

10,00,000

 

 

Premium on Redemption A/c

Dr.

 

1,00,000

 

 

To Debentureholders’ A/c

 

 

11,00,000

 

(Amount of Debentures due for redemption along with premium on redemption)

 

 

 

 

 

 

 

 

 

Debentureholders’ A/c

Dr.

 

11,00,000

 

 

To Bank A/c

 

 

11,00,000

 

(Amount due for redemption paid to debenture holders)

 

 

 

 

 

 

 

 

 

Answer:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

95,000

 

 

To 9% Debenture Application A/c

 

 

95,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

95,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

5,000

 

 

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

 

(9% Debentures issued at 5% discount with term repayable at 10% premium)

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 26:

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

95,000

 

 

To 9% Debenture Application A/c

 

 

95,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

95,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

5,000

 

 

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

 

(9% Debentures issued at 5% discount with term repayable at 10% premium)

 

 

 

 

 

 

 

 

 

Answer:

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit 

Amount

Rs

(a)

Bank A/c

Dr.

 

4,32,000

 

 

To Debenture Application and Allotment A/c

 

 

 

4,32,000

 

(Application money received on 4,000 9%  Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

4,32,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

40,000

 

 

To 9% Debentures A/c

 

 

 

4,00,000

 

To Securities Premium Reserve A/c

 

 

 

32,000

 

To Premium on Redemption of debentures A/c

 

 

 

40,000

 

(4,000; 9% Debentures issued at a premium of Rs 8 and redeemable at premium of 10%)

 

 

 

 

 

 

 

 

(b)

Bank A/c

Dr.

 

6,00,000

 

 

To Debenture Application and Allotment A/c

 

 

 

6,00,000

 

(Application money received on 6,000 9% Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

6,00,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

 

6,00,000

 

To Premium on Redemption of Debentures A/c

 

 

 

60,000

 

(6,000; 9% Debentures issued at par and redeemable at premium of 10%)

 

 

 

 

 

 

 

 

(c)

Bank A/c

Dr.

 

10,50,000

 

 

To Debenture Application and Allotment A/c

 

 

 

10,50,000

 

(Application money received on 10,000 9%Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

10,50,000

 

 

To 9% Debentures A/c

 

 

 

10,00,000

 

To Securities Premium Reserve A/c

 

 

 

50,000

 

(1,000; 9% Debentures issued at a premium of Rs 5)

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 27:

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit 

Amount

Rs

(a)

Bank A/c

Dr.

 

4,32,000

 

 

To Debenture Application and Allotment A/c

 

 

 

4,32,000

 

(Application money received on 4,000 9%  Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

4,32,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

40,000

 

 

To 9% Debentures A/c

 

 

 

4,00,000

 

To Securities Premium Reserve A/c

 

 

 

32,000

 

To Premium on Redemption of debentures A/c

 

 

 

40,000

 

(4,000; 9% Debentures issued at a premium of Rs 8 and redeemable at premium of 10%)

 

 

 

 

 

 

 

 

(b)

Bank A/c

Dr.

 

6,00,000

 

 

To Debenture Application and Allotment A/c

 

 

 

6,00,000

 

(Application money received on 6,000 9% Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

6,00,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

 

6,00,000

 

To Premium on Redemption of Debentures A/c

 

 

 

60,000

 

(6,000; 9% Debentures issued at par and redeemable at premium of 10%)

 

 

 

 

 

 

 

 

(c)

Bank A/c

Dr.

 

10,50,000

 

 

To Debenture Application and Allotment A/c

 

 

 

10,50,000

 

(Application money received on 10,000 9%Debentures)

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

10,50,000

 

 

To 9% Debentures A/c

 

 

 

10,00,000

 

To Securities Premium Reserve A/c

 

 

 

50,000

 

(1,000; 9% Debentures issued at a premium of Rs 5)

 

 

 

 

 

 

 

 

 

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 8.42:

Question 28:

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%)

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 29:

(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)

 

 

 

 

 

 

 

 

 

 

 

Answer:

(a)

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

36,000

 

 

  To Debenture Application A/c

 

 

 

36,000

 

(400 debentures issued at Rs 100 at discount of 10%)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

36,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

4,000

 

 

  To 15% Debenture A/c

 

 

 

40,000

 

(400 debentures issued at discount and redeemable at a par )

 

 

 

 

 

 

 

 

 

 

 

(b)

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

88,000

 

 

  To Debenture Application A/c

 

 

 

88,000

 

(800 debentures issued at Rs 100 at a discount of 10%)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

88,000

 

 

Loss on Issue of Debentures A/c

Dr.

 

8,000

 

 

  To 15% Debenture A/c

 

 

 

80,000

 

  To Premium on Redemption A/c

 

 

 

       8,000

 

  To Securities Premium A/c

 

 

 

8,000

 

(800 debentures issued at a premium of 10% and redeemable at a premium of 10%)

 

 

 

 

 

 

 

 

 

 

 

Page No 8.42:

Question 30:

(a)

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

36,000

 

 

  To Debenture Application A/c

 

 

 

36,000

 

(400 debentures issued at Rs 100 at discount of 10%)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

36,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

4,000

 

 

  To 15% Debenture A/c

 

 

 

40,000

 

(400 debentures issued at discount and redeemable at a par )

 

 

 

 

 

 

 

 

 

 

 

(b)

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

88,000

 

 

  To Debenture Application A/c

 

 

 

88,000

 

(800 debentures issued at Rs 100 at a discount of 10%)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

88,000

 

 

Loss on Issue of Debentures A/c

Dr.

 

8,000

 

 

  To 15% Debenture A/c

 

 

 

80,000

 

  To Premium on Redemption A/c

 

 

 

       8,000

 

  To Securities Premium A/c

 

 

 

8,000

 

(800 debentures issued at a premium of 10% and redeemable at a premium of 10%)

 

 

 

 

 

 

 

 

 

 

 

Answer:

Books of XYZ Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

2005

 

 

 

 

April 01

Bank A/c

Dr.

 

45,000

 

 

To 10% Debenture Application A/c

 

 

 

45,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

 

April 01

10% Debenture Application A/c

Dr.

 

45,000

 

 

Loss on issue of Debentures A/c

Dr.

 

10,000

 

 

To 10% Debenture A/c

 

 

 

50,000

 

To Premium on Redemption A/c

 

 

 

5,000

 

(500 Debentures of Rs 100 each issued at 10% discount with the term repayable at a premium of 10%)

 

 

 

 

2011

 

 

 

 

 

Sept. 30

Interest on Debentures A/c

Dr.

 

2,500

 

 

To Debentureholders’ A/c

 

 

 

2,500

 

(Interest due on 10% Debentures)

 

 

 

 

 

 

 

 

 

 

Sept. 30

Debentureholders’ A/c

Dr.

 

2,500

 

 

To Bank A/c

 

 

 

2,500

 

(Interest on debentures paid to debenture holders)

 

 

 

 

2012

 

 

 

 

 

March 31

Interest on Debentures A/c

Dr.

 

2,500

 

 

To Debentureholders’ A/c

 

 

 

2,500

 

(Interest due on 10% Debentures)

 

 

 

 

 

 

 

 

 

 

March 31

Debentureholders’ A/c

Dr.

 

2,500

 

 

To Bank A/c

 

 

 

2,500

 

(Debenture Interest paid to Debenture holders)

 

 

 

 

 

 

 

 

 

 

March 31

Profit and Loss A/c

Dr.

 

5,000

 

 

To Interest on Debentures A/c

 

 

 

5,000

 

(Interest on debentures transferred to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

 

Working Note:

Interest on Debentures (for half year) =

Page No 8.42:

Question 31:

Books of XYZ Ltd.

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

2005

 

 

 

 

April 01

Bank A/c

Dr.

 

45,000

 

 

To 10% Debenture Application A/c

 

 

 

45,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

 

April 01

10% Debenture Application A/c

Dr.

 

45,000

 

 

Loss on issue of Debentures A/c

Dr.

 

10,000

 

 

To 10% Debenture A/c

 

 

 

50,000

 

To Premium on Redemption A/c

 

 

 

5,000

 

(500 Debentures of Rs 100 each issued at 10% discount with the term repayable at a premium of 10%)

 

 

 

 

2011

 

 

 

 

 

Sept. 30

Interest on Debentures A/c

Dr.

 

2,500

 

 

To Debentureholders’ A/c

 

 

 

2,500

 

(Interest due on 10% Debentures)

 

 

 

 

 

 

 

 

 

 

Sept. 30

Debentureholders’ A/c

Dr.

 

2,500

 

 

To Bank A/c

 

 

 

2,500

 

(Interest on debentures paid to debenture holders)

 

 

 

 

2012

 

 

 

 

 

March 31

Interest on Debentures A/c

Dr.

 

2,500

 

 

To Debentureholders’ A/c

 

 

 

2,500

 

(Interest due on 10% Debentures)

 

 

 

 

 

 

 

 

 

 

March 31

Debentureholders’ A/c

Dr.

 

2,500

 

 

To Bank A/c

 

 

 

2,500

 

(Debenture Interest paid to Debenture holders)

 

 

 

 

 

 

 

 

 

 

March 31

Profit and Loss A/c

Dr.

 

5,000

 

 

To Interest on Debentures A/c

 

 

 

5,000

 

(Interest on debentures transferred to Profit and Loss Account)

 

 

 

 

 

 

 

 

 

 

Working Note:

Interest on Debentures (for half year) =

Answer:

Case (i) Debentures Issued at Premium of 10%

Journal

 

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

5,50,000

 

 

To 9% Debenture Application A/c

 

 

5,50,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

5,50,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

To Securities Premium A/c

 

 

50,000

 

(5,000 9% Debentures of Rs 100 each issued at 10% premium)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ Ltd.

Balance Sheet

Particulars

Note No.

Amount 

(Rs)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Reserves and Surplus

1

50,000

2. Non-Current Liabilities

 

 

a. Long Term Borrowings

2

5,00,000

3. Current Liabilities

 

 

Total

 

5,50,000

 

 

 

II. Assets

 

 

1.Non-Current Assets

 

 

2.Current Assets

 

 

a. Cash and Cash Equivalents

3

5,50,000

Total

 

5,50,000

 

 

 

NOTES TO ACCOUNTS 

 

Note No.

Particulars

Amount 

(Rs)

1

Reserves and Surplus

 

 

Securities Premium

50,000

   

 

2

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

5,50,000

 

 

 

Case (ii) Debentures Issued as Collateral Security to bank against a loan of Rs 4,00,000

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr

 

4,00,000

 

 

To Loan A/c

 

 

4,00,000

 

(Loan taken and Debentures issued as collateral security)

 

 

 

 

 

 

 

 

 

Debenture Suspense A/c

Dr.

 

5,00,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

(Debenture issued as Collateral Security)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ Ltd.

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

 

 

Loan from Bank (Secured by issue of 9% Debentures of Rs 5,00,000)

4,00,000

 

9% Debentures (Secured) (Issued as Collateral Security)

5,00,000

 

 

Less: Debenture Suspense A/c

(5,00,000)

-

   

 

2

Cash and Cash Equivalents

 

 

Cash at Bank

4,00,000

 

 

 

Case (iii) Debentures Issued at Discount of 5%

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

4,75,000

 

 

To 9% Debenture Application A/c

 

 

4,75,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

4,75,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

25,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

(5,000 9% Debentures of Rs 100 each issued at a discount of 5%)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ 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

 

 

a. Other Non-Current Assets

2

25,000

2.Current Assets

 

 

a. Cash and Cash Equivalents

3

4,75,000

Total

 

5,00,000

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

(Rs)

1

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

2

Other Non-Current Assets

 

 

Discount on Issue of Debentures

25,000

   

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

4,75,000

 

 

 

Case (iv) Debentures are issued to a supplier of machinery costing Rs 4,50,000

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

4,50,000

 

 

To Vendor

 

 

4,50,000

 

(Machinery purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

4,50,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

50,000

 

 

To 9% Debentures

 

 

5,00,000

 

(Issued 5,000 9% debentures to Vendor of Machinery)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ 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

 

 

a. Fixed Assets

 

 

i. Tangible Assets

2

4,50,000

b. Other Non-Current Assets

3

50,000

2. Current Assets

 

 

Total

 

5,00,000

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

(Rs)

1

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

2

Tangible Assets

 

 

Machinery

4,50,000

   

 

3

Other Non-Current Assets

 

 

Discount on Issue of Debentures

50,000

 

 

 

 

Page No 8.42:

Question 32:

Case (i) Debentures Issued at Premium of 10%

Journal

 

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

5,50,000

 

 

To 9% Debenture Application A/c

 

 

5,50,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

5,50,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

To Securities Premium A/c

 

 

50,000

 

(5,000 9% Debentures of Rs 100 each issued at 10% premium)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ Ltd.

Balance Sheet

Particulars

Note No.

Amount 

(Rs)

I. Equity and Liabilities

 

 

1. Shareholders’ Funds

 

 

a. Reserves and Surplus

1

50,000

2. Non-Current Liabilities

 

 

a. Long Term Borrowings

2

5,00,000

3. Current Liabilities

 

 

Total

 

5,50,000

 

 

 

II. Assets

 

 

1.Non-Current Assets

 

 

2.Current Assets

 

 

a. Cash and Cash Equivalents

3

5,50,000

Total

 

5,50,000

 

 

 

NOTES TO ACCOUNTS 

 

Note No.

Particulars

Amount 

(Rs)

1

Reserves and Surplus

 

 

Securities Premium

50,000

   

 

2

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

5,50,000

 

 

 

Case (ii) Debentures Issued as Collateral Security to bank against a loan of Rs 4,00,000

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr

 

4,00,000

 

 

To Loan A/c

 

 

4,00,000

 

(Loan taken and Debentures issued as collateral security)

 

 

 

 

 

 

 

 

 

Debenture Suspense A/c

Dr.

 

5,00,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

(Debenture issued as Collateral Security)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ Ltd.

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

 

 

Loan from Bank (Secured by issue of 9% Debentures of Rs 5,00,000)

4,00,000

 

9% Debentures (Secured) (Issued as Collateral Security)

5,00,000

 

 

Less: Debenture Suspense A/c

(5,00,000)

-

   

 

2

Cash and Cash Equivalents

 

 

Cash at Bank

4,00,000

 

 

 

Case (iii) Debentures Issued at Discount of 5%

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

4,75,000

 

 

To 9% Debenture Application A/c

 

 

4,75,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

4,75,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

25,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

(5,000 9% Debentures of Rs 100 each issued at a discount of 5%)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ 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

 

 

a. Other Non-Current Assets

2

25,000

2.Current Assets

 

 

a. Cash and Cash Equivalents

3

4,75,000

Total

 

5,00,000

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

(Rs)

1

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

2

Other Non-Current Assets

 

 

Discount on Issue of Debentures

25,000

   

 

3

Cash and Cash Equivalents

 

 

Cash at Bank

4,75,000

 

 

 

Case (iv) Debentures are issued to a supplier of machinery costing Rs 4,50,000

Journal

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Machinery A/c

Dr.

 

4,50,000

 

 

To Vendor

 

 

4,50,000

 

(Machinery purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

4,50,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

50,000

 

 

To 9% Debentures

 

 

5,00,000

 

(Issued 5,000 9% debentures to Vendor of Machinery)

 

 

 

 

 

 

 

 

Posting in the Company's Balance Sheet

XYZ 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

 

 

a. Fixed Assets

 

 

i. Tangible Assets

2

4,50,000

b. Other Non-Current Assets

3

50,000

2. Current Assets

 

 

Total

 

5,00,000

 

 

 

NOTES TO ACCOUNTS

 

Note No.

Particulars

Amount

(Rs)

1

Long Term Borrowings

 

 

9% Debentures (Secured)

5,00,000

   

 

2

Tangible Assets

 

 

Machinery

4,50,000

   

 

3

Other Non-Current Assets

 

 

Discount on Issue of Debentures

50,000

 

 

 

 

Answer:

Date

Particulars

L.F.

Debit Amount

Rs

Credit Amount

Rs

Case (a)

Machinery A/c

Dr.

 

1,65,000

 

 

To Vendor A/c

 

 

1,65,000

 

(Machinery purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

1,65,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

15,000

 

 

To 9% Debentures A/c

 

 

1,50,000

 

To Premium on Redemption A/c

 

 

15,000

 

To Securities Premium A/c

 

 

15,000

 

(1,500 9% Debentures of Rs 100 each issued at Rs 10 premium)

 

 

 

 

 

 

 

 

Case (b)

Debenture Suspense A/c

Dr.

 

1,50,000

 

 

Loss on Issue of Debentures A/c

Dr.

 

15,000

 

 

To 9% Debentures A/c

 

 

1,50,000

 

To Premium on Redemption A/c

 

 

15,000

 

(Debenture issued at as collateral Security)

 

 

 

 

 

 

 

 

Case (c)

Interest on Debentures A/c

Dr.

 

8,100

 

 

To Bank A/c

 

 

8,100

 

(Half yearly Interest paid on 9% Debenture of Rs 1,80,000) (WN)

 

 

 

 

 

 

 

 

Case (d)

Bank A/c

Dr.

 

95,000

 

 

To 9% Debentures Application A/c

 

 

95,000

 

(Debenture application money received)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

95,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

5,000

 

 

Loss on Issue of Debenture A/c

Dr.

 

10,000

 

 

To 9% Debentures A/c

 

 

1,00,000

 

To Premium on Redemption A/c

 

 

10,000

 

(1,000 9% Debentures of Rs 100 each issued at 5% discount and repayable at a premium of 10%)

 

 

 

 

 

 

 

 

Working Note:

WN Calculation of Interest on Debentures (Case c)

Interest on Debentures (for half year) =



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