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12th | Company Accounts- Issue of Debentures| Question No.  11 To 15 | Ts Grewal Solution 2022-2023

Question 11:


Linux Ltd. issued 12,000; 8% Debentures of  ` 100 each at a discount of 5% payable as 25% on application;20% on allotment and balance after three months.
Pass Journal entries.

Answer:


Face Value of Debenture = ` 100

Discount (` 100 × 5%) = ` 5

Issue Price = ` 95

Amount Payable as:

On Application (25%)

` 25 per debenture

On Allotment (20%)

` 20 (25 – 5) per debenture

On First and Final Call (50%)

` 50 per debenture

 

Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

3,00,000

 

 

To 8% Debenture Application A/c

 

 

3,00,000

 

(Application money received for 12,000 8% Debentures at ` 25 each)

 

 

 

 

 

 

 

 

 

8% Debenture Application A/c

Dr.

 

3,00,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Debenture application money transferred to 8% Debentures account)

 

 

 

 

 

 

 

 

 

8% Debentures Allotment A/c

Dr.

 

2,40,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

60,000

 

 

To 8% Debentures A/c

 

 

3,00,000

 

(Allotment money due on 12,000 8% Debentures at ` 20 each at discount of ` 5)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

2,40,000

 

 

To 8% Debenture Allotment A/c

 

 

2,40,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

8% Debenture First and Final Call A/c

Dr.

 

6,00,000

 

 

To 8% Debentures A/c

 

 

6,00,000

 

(First and final call money due on 12,000 8% Debentures at ` 50 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

6,00,000

 

 

To 8% Debentures First and Final Call A/c

 

 

6,00,000

 

(First and Final call money received)

 

 

 

 

 

 

 

 

 

Question 12:


Alka Ltd . issued 5,000, 10% Debentures of  `  1,000 each at a discount of 10% redeemable at a premium of 5% after 5 years . According to the terms of issue  `  500 was payable  on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures. (Delhi 2015 C)

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

Bank A/c (5,000×500)

Dr.

 

25,00,000

 

 

  To Debenture Application A/c

 

 

 

25,00,000

 

(Received application money on 5,000 debentures)

 

 

 

 

 

 

 

 

 

 

 

Debenture Application A/c

Dr.

 

25,00,000

 

 

  To 10% Debentures A/c

 

 

 

25,00,000

 

(Transfer of application money to Debentures A/c)

 

 

 

 

 

 

 

 

 

 

 

Debenture Allotment A/c (5,000×400)

Dr.

 

20,00,000

 

 

Discount on issue of Debentures A/c (5,000×100)

 

 

5,00,000

 

 

Loss on issue of Debentures A/c (5,000×50)

Dr.

 

2,50,000

 

 

  To 10% Debentures A/c (5,000×500)

 

 

 

25,00,000

 

  To Premium on Redemption of Debentures A/c (5,000×50)

 

 

 

2,50,000

 

(Allotment due on 5,000 Debentures at a discount of ` 100 per debentures and redeemable at premium of 5%)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

   20,00,000

 

 

  To Debenture Allotment A/c

 

 

 

20,00,000

 

(Allotment money received)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Question 13:


Joy Ltd. company bought a Building for  ` 9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of  ` 100 each at a discount of 10%.

Give Journal entries.

Answer:


Books of Joy Limited
Journal

Date

Particulars

L.F.

Debit

(`)

Credit

(`)

 

Building A/c

Dr.

 

9,00,000

 

 

To Vendor A/c

 

 

9,00,000

 

(Building purchased)

 

 

 

 

 

 

 

 

 

Vendor A/c

Dr.

 

9,00,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

1,00,000

 

 

To 10% Debentures A/c

 

 

10,00,000

 

(Issued 10,000, 10% debentures at 10% discount)

 

 

 

 

 

 

 

 

 

Working Note:

Number of debentute to be issued= Purchase consideration/issue price=9,00,000/90=10,000 Debentures

 

Question 14:


Amrit Ltd . was promoted by Amrit and Bhaskar with an authorised capital of  `  10,00,000 divide into 1,00,000 shares of  `  10 each.
The company decided to issue 1,000,6% Debentures of 
`  100 each to Amrit and Bhaskar  each for their services in incorporating the company.
Pass journal entry.

Answer:


Journal

Date

Particulars

L.F.

Debit

 (`)

Credit

 (`)

 

 

 

 

 

 

 

Incorporation Cost A/c (2,000 × 100)

Dr.

 

2,00,000

 

 

  To 6% Debentures A/c

 

 

 

2,00,000

 

( Debentures issued to promoters)

 

 

 

 

 

 

 

 

 

 

 

Question 15:   B Ltd. issued 9% Debentures of ` 100 each at a premium of 20% to Vendors for purchase of plant costing ` 6,00,000.


Pass the necessary Journal entry for the payment made to vendors. (CBSE 2020)

Answer:


Books of B Ltd.

Journal

Date

Particular

L.F.

Debit

`

Credit

`

 

Plant A/c

Dr.

 

6,00,000

 

 

To Vendor’s A/c

 

 

6,00,000

 

(Being purchase of plant)

 

 

 

 

 

 

 

 

 

Vendor’s A/c                                             Dr.

 

6,00,000

 

 

To 9% Debentures A/c

 

 

5,00,000

 

To Securities Premium Reserve A/c

 

 

1,00,000

 

(Being 9% Debentures issued of ` 100 each at a premium of 20% to Vendors for purchase of plant costing ` 6,00,000 at `120)

 

 

 

 

 

 

 

 

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