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प्रश्न
MK Ltd. has outstanding Rs. 30,000 11% debentures of Rs. 100 each redeemable at 10% premium as follows:
| March 31, 2018 - | 10,000 debentures |
| March 31, 2019 - | 12,000 debentures |
| March 31, 2020 - | Remaining debentures |
Pass necessary journal entries in the books of the company.
उत्तर
| In the books of MK limited | ||||
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
| 2017 | ||||
| Apr. 30 | Debenture Redemption Investment A/c ...Dr. | 1,50,000 | ||
| To Bank A/c | 1,50,000 | |||
| (Being amount invested) | ||||
| 2018 | ||||
| Mar. 31 | 11% Debenture A/c ...Dr. | 10,00,000 | ||
| Premium on redemption A/c ...Dr. | 1,00,000 | |||
| To Debenture holder | 11,00,000 | |||
| (Being amount transferred to debenture holder) | ||||
| Mar. 31 | Debenture holder A/c ...Dr. | 11,00,000 | ||
| To Bank A/c | 11,00,000 | |||
| (Being amount paid to debenture holder) | ||||
| Apr. 30 | Debenture Redemption Investment A/c ...Dr. | 30,000 | ||
| To Bank A/c | 30,000 | |||
| (Being received amount invested) | ||||
| 2019 | ||||
| Mar. 31 | 11% Debenture A/c ...Dr. | 12,00,000 | ||
| Premium on redemption A/c ...Dr. | 1,20,000 | |||
| To Debenture holder A/c | 13,20,000 | |||
| (Being amount transfer to debenture holder) | ||||
| Mar. 31 | Debenture holder A/c ...Dr. | 13,20,000 | ||
| To Bank A/c | 13,20,000 | |||
| (Being amount paid to debenture holder) | ||||
| Apr. 30 | Bank A/c ...Dr. | 60,000 | ||
| To Debenture Redemption Investment | 60,000 | |||
| (Being investment sold) | ||||
| 2020 | ||||
| Mar. 31 | Bank A/c ...Dr. | 1,20,000 | ||
| To Debenture Redemption Investment | 1,20,000 | |||
| (Being investment sold) | ||||
| Mar. 31 | 11% Debenture A/c ...Dr. | 8,00,000 | ||
| Premium on redemption | 80,000 | |||
| To Debenture holder A/c | 8,80,000 | |||
| (Being amount transfer to debenture holder) | ||||
| Mar. 31 | Debenture holder A/c ...Dr. | 8,80,000 | ||
| To Bank A/c | 8,80,000 | |||
| (Being amount paid to debenture holder) | ||||
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संबंधित प्रश्न
Long Answer Question
Describe the meaning of ‘Debenture Issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?
Long Answer Question
How is ‘Discount on Issue of Debentures’ treated in the books of accounts? How will you deal with the ‘discount in issue of debentures’ when the debentures are to be redeemed in instalments?
B.Ltd. purchased assets of the book value of Rs 4,00,000 and took over the liability of Rs 50,000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs,3,80,000, be paid by issuing debentures of Rs 100 each.
What Journal entries will be made in the following three cases, if debentures are issued: (a) at par; (b) at discount; (c) at premium of 10%? It was agreed that any fraction of debentures be paid in cash.
Iron Products Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows;
(i) ₹ 40 , including premium of ₹ 10 on applications;
(ii) ₹ 45, including premium of ₹ 15 on allotment ; and
(iii) Balance as first and final call.
The issue was subscribed and allotment made. Calls were made and due amount was received .
Pass Journal entries .
Bright Ltd. took over the assets of ₹ 6,60,000 and liabilities of ₹ 80,000 of Star Ltd. for an agreed purchase consideration of ₹ 6,00,000 payable 10% in cash and the balance by the issue of 12% Debentures of ₹ 100 each. Give necessary Journal entries in the books of Bright Ltd., assuming that:
Case (a): The debentures are issued at par.
Case (b): The debentures are issued at 20% premium.
Case (c): The debentures are issued at 10% discount.
Green Ltd. purchased the assets of Strong Ltd. for ₹ 40,00,000 and took over liabilities of 7,00,000 at an agreed value of ₹ 32,40,000. Payment was made by issuing 10% Debentures of 100 each at a discount of 10%. Pass the necessary Journal entries in the books of Green Ltd.
Wellbeing Ltd. took over assets of ₹ 9,80,000 and liabilities of ₹ 40,000 of HDR Ltd. at an agreed value of ₹ 9,00,000. Wellbeing Ltd. paid to HDR Ltd. by issue of 9% Debentures of ₹ 100 each at a premium of 20%. Pass necessary Journal entries to record the above transactions in the books of Wellbeing Ltd.
Kitply Ltd.issued ₹ 2,00,000, 10% Debentures at a discount of 5% .The terms of issue provide the repayment at the end of 4 years . Kitply Ltd.has a balance of ₹ 5,00,000 in Securities Premium Reserve . The company decided to write off discount on issue of debentures from Securities Premium Reserve in the first year.
Pass the journal entry.
A 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 instalments.
Pass the Journal entries for issue of debentures and writing off the discount.
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.
Fill in the blank.
For recording the issue of debentures as collateral security by a journal entry _______ account is debited.
Rehana, Shakina and Jasmine are partners. They share When debentures are issued as collateral security, the final entry for recording the transaction in the books is ______.
When the debenture of face value of ₹ 100 is issued at ₹ 100 is called, issue off debenture at ______.
Assertion (A): Issue of debenture does not result in dilution of interest of equity shareholders.
Reason (R): Debenture holders have voting rights.
Discount on issue of debentures is a ______
Which of the following is false with respect to debentures ?
Which of the following is not a characteristic of Bearer Debentures?
Assertion (A): Sarita Pvt. Ltd. issued 15% 10,000 debentures at par @ ₹ 100 per debenture. The company suffered a loss but still the directors of the company paid interest on debentures.
Reason (R): Interest on debenture is a charge against profits and therefore, its payment is not subject to the earning of profit.
X Ltd. had outstanding 20,000 12% debentures of Rs. 100 each redeemable on June 30, 2019. Record necessary journal entries at the time of redemption.
