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12th | Company Accounts- Issue of Debentures| Question No.  1 To 5 | Ts Grewal Solution 2022-2023

Question 1:


JS 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.

 

Answer:


Books of JS Ltd.

Journal

Date

Particulars

 

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

50,000

 

 

To 9% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 2,000 debentures at ` 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 ` 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 ` 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)

 

 

 

 

Question 2:


Droga  Ltd. issued 2,000; 9% Debentures of ` 100 each on the following terms:
`20 on applications ;` 20 on allotment ; ` 30 on first call ; ` 30 on final call.
The public applied for 2,400 debentures. Applications for 1,800 debentures were accepted in full. Applications for 400 debentures were allotted 200 debentures and applications for 200 debentures were rejected. Pass necessary Journal entries.

Answer:


Books of Droga Ltd.

Journal

Date

Particular

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

48,000

 

 

To 9% Debenture Application A/c

 

 

48,000

 

(Debenture application money received for 2,400 debentures at ` 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 ` 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 ` 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 ` 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 ` 30 each)

 

 

 

 

 

 

 

 

 

Question 3:


Venus Ltd. issued 40,000; 10% Debentures of ` 100 each at par for cash payable in full along with the application. Applications  were received for 60,000 debentures . Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

Bank A/c (60,000 ×100)

Dr.

 

60,00,000

 

 

  To Debenture Application and Allotment A/c

 

 

 

60,00,000

 

(Received application money on 60,000 Debenture)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application and Allotment A/c

Dr.

 

60,00,000

 

 

  To 10% Debentures  A/c (40,000 ×100)

 

 

 

40,00,000

 

  To Bank A/c

 

 

 

20,00,000

 

(Application money transferred to Debentures A/c)

 

 

 

 

 

 

 

 

 

 

 

Question 4:


Nipa Limited issued ` 10,00,000 Debentures of ` 100 each at a premium of 10% , payable 25% on application (including premium) and the balance on allotment . The debentures were applied for and the amount was dully received.
You are required to give Journal entries and prepare Cash Book.

Answer:


Face Value of Debenture = ` 100

Premium (` 100 × 10%) = ` 10

Issue Price = ` 110

Amount Payable as:

 

Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

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 ` 25 including premium of `10 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 ` 85 each)

 

 

 

 

 

 

 

 

 

 

Cash Book

Dr.

 

Cr.

Date

Particulars

L.F.

Bank

`

Date

Particulars

L.F.

Bank

`

 

Debenture Application

 

2,50,000

 

 

 

 

 

Debenture Allotment

 

8,50,000

 

 

 

 

 

 

 

 

 

Balance c/d

 

11,00,000

 

 

 

11,00,000

 

 

 

11,00,000

 

 

 

 

 

 

 

 

On Application (25%)

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

On Allotment (85%)

` 85 per debenture

 

 

Question 5:


Raj Ltd. issued 5,000; 8% Debentures of ` 100 each at a premium of 5% payable as follows:
` 10 on application ; ` 20 along with premium on allotment and balance on first and final call.
Pass necessary Journal entries.

Answer:


Books of Raj Ltd.

Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

50,000

 

 

To 8% Debenture Application A/c

 

 

50,000

 

(Debenture application money received for 5,000 debentures at ` 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.

 

1,00,000

 

 

To 8% Debentures A/c

 

 

75,000

 

To Securities Premium A/c

 

 

25,000

 

(Debenture allotment due on 5,000 8% Debentures at ` 20 including premium of ` 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

1,00,000

 

 

To 8% Debentures Allotment A/c

 

 

1,00,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

8% Debentures First and Final Call A/c

Dr.

 

3,75,000

 

 

To 8% Debenture A/c

 

 

3,75,000

 

(Debenture first and final call due on 5,000 Debentures at ` 75 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,75,000

 

 

To 8% Debenture First and Final Call A/c

 

 

3,75,000

 

(Debenture first and final call received)

 

 

 

 

 

 

 

 

 

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Ts Grewal Solution 2022-2023

Class 12 / Volume – 2

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