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प्रश्न
XYZ Ltd. Issued 6,000, 12% Debentures of ? 50 each on April 1, 2014. Interest on these debenture is payable annually 3151 March each year. The debentures are redeemable in four equal installments at end of third, fourth, fifth and sixth year. You are required to pan journal entries at the time of issue and redemption of debentures in the books of the company under following cases:
- Debentures are issued at par and redeemable at par.
- Debentures are issued at a premium of 10% and redeemable at par.
- Debentures are issued at a discount of 10% and redeemable at par.
- Debenture are issued at par but redeemable at a premium of 10%.
- Debentures are issued at a premium of 10% and redeemable at premium of 10%.
- Debenture are issued at a discount of 10% and redeemable at a premium of 10%.
उत्तर
(i) Debentures are issued at par and redeemable at par.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 3,00,000 | ||
| To Debenture application and allotment A/c | 3,00,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 3,00,000 | ||
| To 12% Debenture A/c | 3,00,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| To Debenture holder A/c | 75,000 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 75,000 | ||
| To Bank A/c | 75,000 | |||
| (Being amount paid to debenture holder) | ||||
(ii) Debentures are issued at a premium of 10% and redeemable at par.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 3,30,000 | ||
| To Debenture application and allotment A/c | 3,30,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 3,30,000 | ||
| To 12% Debenture A/c | 3,00,000 | |||
| To Securities Premium A/c | 30,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| To Debenture holder A/c | 75,000 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 75,000 | ||
| To Bank A/c | 75,000 | |||
| (Being amount paid to debenture holder) | ||||
(iii) Debentures are issued at a discount of 10% and redeemable at par.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 2,70,000 | ||
| To Debenture application and allotment A/c | 2,70,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 2,70,000 | ||
| Loss on issue of Debenture A/c ...Dr. | 60,000 | |||
| To 12% Debenture A/c | 3,00,000 | |||
| To Premium on Redemption A/c | 30,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| Premium on Redemption A/c ...Dr. | 7,500 | |||
| To Debenture holder A/c | 82,500 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 82,500 | ||
| To Bank A/c | 82,500 | |||
| (Being amount paid to debenture holder) | ||||
(iv) Debenture are issued at par but redeemable at a premium of 10%.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 3,00,000 | ||
| To Debenture application and allotment A/c | 3,00,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 3,00,000 | ||
| Loss on issue of Debenture A/c ...Dr. | 30,000 | |||
| To 12% Debenture A/c | 3,00,000 | |||
| To Premium on Redemption A/c | 30,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| Premium on Redemption A/c ...Dr. | 7,500 | |||
| To Debenture holder A/c | 82,500 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 82,500 | ||
| To Bank A/c | 82,500 | |||
| (Being amount paid to debenture holder) | ||||
(v) Debentures are issued at a premium of 10% and redeemable at premium of 10%.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 3,30,000 | ||
| To Debenture application and allotment A/c | 3,30,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 3,30,000 | ||
| Loss on issue of Debenture A/c ...Dr. | 30,000 | |||
| To 12% Debenture A/c | 3,00,000 | |||
| To Securities Premium A/c | 30,000 | |||
| To Premium on Redemption A/c | 30,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| Premium on Redemption A/c ...Dr. | 7,500 | |||
| To Debenture holder A/c | 82,500 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 82,500 | ||
| To Bank A/c | 82,500 | |||
| (Being amount paid to debenture holder) | ||||
(vi) Debenture are issued at a discount of 10% and redeemable at a premium of 10%.
| In the books of XYZ Ltd. Journal Entries |
||||
| Date | Particulars | L.F. | Dr. (Rs.) | Cr. (Rs.) |
| 1. | Bank A/c ...Dr. | 2,70,000 | ||
| To Debenture application and allotment A/c | 2,70,000 | |||
| (Being debenture amount received) | ||||
| 2. | Debenture application and allotment A/c ...Dr. | 2,70,000 | ||
| Discount on issue of Debenture A/c ...Dr. | 30,000 | |||
| To 12% Debenture A/c | 3,00,000 | |||
| (Being amount transfer to debenture) | ||||
| 3. | 12% Debenture A/c ...Dr. | 75,000 | ||
| To Debenture holder A/c | 75,000 | |||
| (Being amount transfer to debenture holder) | ||||
| 4. | Debenture holder A/c ...Dr. | 75,000 | ||
| To Bank A/c | 75,000 | |||
| (Being amount paid to debenture holder) | ||||
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संबंधित प्रश्न
Short Answer Question
What is meant by ‘Issue of debenture at discount and redeemable at premium?
Short Answer Question
What is discount on issue of debentures?
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.
Vishwas Ltd. issued 2,000; 9% Debentures of ₹ 100 each payable as follows:
₹ 25 on application; ₹ 25 on allotment and ₹ 50 on first and final call.
Applications were received for all the debentures along with the application money did allotment was made . Call money was also received on the due date.
Pass necessary Journal entries in the books of the company.
Alok Ltd. issued 7,000, 10% Debentures of ₹ 500 each at a premium of ₹ 50 per debenture redeemable at a premium of 10% after 5 years. According to the terms of issue, ₹ 200 was payable on application and balance on allotment.
Record necessary Journal entries at the time of issue of 10% Debentures.
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.
Grown Ltd. issued 500, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the promoters for their services to incorporate the company. It also issued 100, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the underwriters towards their commission. Pass the Journal entries.
Exe Ltd. purchased the assets of the book value ₹4,00,000 and took over the liabilities of ₹ 50,000 from Mohan Bros.It was agreed that the purchase consideration ,settled at ₹3,80,000 be paid by issuing debentures of ₹ 100 each.
Pass journal entries if debenture are issued:
(a) at par
(b) at a discount of 10% and
(c) at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash.
Journalise the following transaction at the time of issue of 12% Debentures:
Nandan Ltd. issued ₹90,000, 12% Debentures of ₹ 100 each at a discount of 5% redeemable at 110%.
On 1st January, 2017, Raha Ltd. issued 6,000, 8% Debentures of nominal (face) value of ₹ 100 each redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years. It has a balance of ₹ 10,000 in Securities Premium Reserve.
Pass Journal entries. Also give Journal entries for writing off Loss on Issue of Debentures.
On 1st June, 2017, R Energy Ltd. issued 10,000, 7% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% at the end of five years. All the debentures were subscribed and allotment was made.
Prepare the Balance Sheet (extract) as at 31st March, 2018.
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.
The word 'debenture' has been derived from which Latin word (which means to borrow)?
Premium on redemption is shown under which head until debentures are redeemed?
Which of the following given statement is correct.
Statement 1 - "Shares cannot be converted into debentures whereas debentures can be converted into shares"
Statement 2 - "Shares can be converted into debentures whereas debentures cannot be converted into shares"
Which of the following. column indicated in·the statement given below is to be credited?
"Writing off the loss on issue of debentures"
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 ______.
Discount on issue of debentures is a ______
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.
