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Question
'Ananya Ltd' had an authorized capital of Rs 10,00,00,000 divided into 10,00,000 equity shares of Rs 100 each. The company had already issued 2,00,000 shares. The dividend paid per share for the year ended 31.3.2007 was Rs 30. The management decided to export its products to African countries. To meet the requirements of additional funds, the finance manager put up the following three alternate proposals before the Board of Directors:
(1) Issue 47,500 equity shares at a premium of Rs 100 per share.
(2) Obtain a long-term loan from the bank which was available at 12% per annum.
(3) Issue 9% debentures at a discount of 5%.
After evaluating these alternatives the company decided to issue 1,00,000, 9% debentures on 1.4.2008. The face value of each debenture was Rs 100. These debentures were redeemable in four installments starting from the end of the third year, which was as follows:
| Year | Rs |
| III | 10,00,000 |
| IV | 20,00,000 |
| V | 30,00,000 |
| VI | 40,00,000 |
Prepare 9% debenture account from 1.4.2008 till all the debentures were redeemed.
Solution
| 9% Debentures A/c | |||||||
| Dr. | Cr. | ||||||
| Date | Particulars | J.F | Rs | Date | Particulars | J.F | Rs |
|
2008-09
|
To Balance c/d
|
1,00,00,000
|
2008-09
|
By Debenture Application A/c By Loss on Issue of |
95,00,000
5,00,000 |
||
| 1,00,00,000 | 1,00,00,000 | ||||||
| 2009-10 | To Balance c/d | 1,00,00,000 | 2009-10 | By Balance b/d | 1,00,00,000 | ||
| 1,00,00,000 | 1,00,00,000 | ||||||
|
2010-11
|
To Debenture holder’s A/c To Balance c/d
|
10,00,000 90,00,000
|
2010-11
|
By Balance b/d
|
1,00,00,000
|
||
| 2011-12 |
To Debenture holder’s A/c To Balance c/d |
20,00,000 70,00,000 |
2011-12
|
By Balance b/d
|
90,00,000
|
||
| 90,00,000 | 90,00,000 | ||||||
|
2012-13
|
To Debenture holder’s A/c To Balance c/d |
30,00,000 40,00,000 |
2012-13
|
By Balance b/d
|
70,00,000
|
||
| 70,00,000 | 70,00,000 | ||||||
| 2013-14 | To Debenture holder’s A/c | 40,00,000 | 2013-14 | By Balance b/d | 40,00,000 | ||
| 40,00,000 | 40,00,000 | ||||||
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