Issue of Debentures with Terms of Redemption

Explain the secretarial procedure regarding issue of debentures.

Pass the necessary journal entries for the issue of debentures in the following cases:

Rs 60,000, 12% debentures of Rs 100 each issued at a discount of 5% redeemable at Rs 105.

Sinco Ltd. purchased assets of the book value of ₹ 1,98,000 from Dixon Ltd. It was agreed that the purchase consideration be paid by issuing 10% debentures of 100 each.

Record the necessary journal entries in the books of Sinco Ltd. assuming that the debentures have been issued:

1. At a discount of 10%.
2. At a premium of 10%.

TRK Ltd. issued 767, 9% debentures of Rs.100 each on 1-1-2016. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at a discount of 3% and were redeemable at a premium of 7%.

(b) When debentures were issued at a premium of 4% and were redeemable at a premium of 9%.

Taneja Constructions Ltd. has an outstanding balance of Rs 5,00,000, 7% debentures of Rs 100 each redeemable at a premium of 10%. According to the terms of redemption, the company redeemed 30% of the above debentures by converting them into shares of Rs 50 each at a premium of 20%. Record the entries for the redemption of debentures in the books of Taneja Constructions Ltd.

On 2.3.2016 L and B Ltd. issued 635, 9% debentures of Rs.500 each. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at 5% discount, redeemable at 10% premium.

(b) When debentures were issued at 12% premium, redeemable at 6% premium.

Pioneer Fitness Ltd. took over the running business of Healthy World Ltd. having assets of ₹ 10,00,000 and liabilities of ₹ 1,70,000 by:

1. Issuing 8,000 8% Debentures of ₹ 100 each at 5% premium redeemable after 6 years @ ₹ 110; and
2. Cheque for ₹ 50,000.

Pass the Journal entries in the books of Pioneer Fitness Ltd.

Pass the necessary journal entries for the issue of debentures in the following cases:

Rs 30,000, 12% debentures of Rs 100 each issued at a discount of 5% redeemable at par.