Question 26:
Star Ltd. took over the assets of ` 6,60,000 and
liabilities of `
80,000 of Moon Ltd. for ` 6,00,000. Give necessary Journal entries in the books
of Star Ltd. assuming that:
Case (a): The purchase consideration was payable 10% in cash
and the balance in 5,400; 12% Debentures of ` 100 each.
Case (b): The purchase consideration was payable 10% in cash
and the balance in 4,500; 12% Debentures of ` 100 each issued at 20% premium.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
Assets A/c |
Dr. |
|
6,60,000 |
|
|
|
Goodwill A/c (Balancing
Figure) |
Dr. |
|
20,000 |
|
|
|
To Liabilities A/c |
|
|
|
80,000 |
|
|
To Moon Ltd. |
|
|
|
6,00,000 |
|
|
(Purchase of business
took over) |
|
|
|
|
|
|
|
|
|
|
|
|
a. |
Moon Ltd. |
Dr. |
|
6,00,000 |
|
|
|
To Cash A/c |
|
|
|
60,000 |
|
|
To 12% Debentures
A/c |
|
|
|
5,40,000 |
|
|
(Purchase consideration
discharged) |
|
|
|
|
|
|
|
|
|
|
|
|
b. |
Moon Ltd. |
Dr. |
|
6,00,000 |
|
|
|
To Cash A/c |
|
|
|
60,000 |
|
|
To 12% Debentures
A/c |
|
|
|
4,50,000 |
|
|
To Security
Premium Reserve A/c |
|
|
|
90,000 |
|
|
( Purchase consideration
discharged) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Question 27:
A company took a loan of ` 4,00,000 from Bandhan Bank Ltd. and issued 8% Debentures
of ` 4,00,000 as a collateral security.
Answer:
When Debentures Issued as Collateral Security are
shown separately
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
Bank A/c |
Dr. |
|
4,00,000 |
|
|
|
To Loan from
Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
|
(Loan taken against issuing 8% Debentures as
collateral security) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Suspense A/c |
Dr. |
|
4,00,000 |
|
|
|
To 8%
Debenture A/c |
|
|
4,00,000 |
|
|
|
(Debentures issued as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
Posting in the Company's Balance Sheet (When
Debentures Issued as Collateral Security are shown separately)
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I Equity and Liabilities |
|
|
|
1.Shareholders’
Funds |
|
|
|
2.Non-Current
Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
4,00,000 |
|
3.Current
Liabilities |
|
|
|
Total |
|
4,00,000 |
|
|
|
|
|
II Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
4,00,000 |
|
Total |
|
4,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
|
Secured: |
|
|
|
|
Loan from Bandhan Bank (Secured by issue of Debentures of ` 4,00,000) |
4,00,000 |
|
|
|
8%
Debentures (Issued as Collateral Security to Bank against Loan) |
4,00,000 |
|
|
|
Less: Debenture Suspense Account |
4,00,000 |
- |
|
|
|
4,00,000 |
|
|
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
4,00,000 |
|
|
|
|
|
|
Alternative Method: When debentures Issued as Collateral Security are
not shown separately
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
Bank A/c |
Dr. |
|
4,00,000 |
|
|
|
To Loan From
Bandhan Bank Ltd. |
|
|
4,00,000 |
|
|
|
(Loan taken from Bandhan
Bank secured by issuing Debentures as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
(When Debentures
Issued
as Collateral Security are not shown separately)
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
2. Non-Current
Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
4,00,000 |
|
3. Current
Liabilities |
|
|
|
Total |
|
4,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
4,00,000 |
|
Total |
|
4,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan from Bandhan Bank (Secured by issue of 8% Debentures of ` 4,00,000 as Collateral Security) |
4,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
4,00,000 |
|
|
|
|
Question 28:
Best Barcode Ltd. took a loan of ` 5,00,000 from a
bank giving ` 6,00,000; 9% Debentures as collateral security. Pass
journal entries regarding issue of debentures , if
any, and show this loan in the Balance Sheet of the company.
Answer:
|
Best Barcode Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
2.
Non-Current Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
5,00,000 |
|
3. Current
Liabilities |
|
|
|
Total |
|
5,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
5,00,000 |
|
Total |
|
5,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Loan (Secured by issue of 9% Debentures of ` 6,00,000 as Collateral Security) |
5,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
5,00,000 |
|
|
|
|
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
Bank A/c |
Dr. |
|
5,00,000 |
|
|
|
To Loan A/c |
|
|
5,00,000 |
|
|
|
(Loan taken against issuing 9% Debentures as
collateral Security) |
|
|
|
|
|
|
|
|
|
|
|
Alternative Method:
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
|
|
|
Bank A/c |
Dr. |
|
5,00,000 |
|
|
|
To Loan A/c |
|
|
5,00,000 |
|
|
|
(Loan taken against issuing 9% debentures as
collateral Security) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Suspense A/c |
Dr. |
|
6,00,000 |
|
|
|
To 9%
Debentures A/c |
|
|
6,00,000 |
|
|
|
(Issued 9% Debentures of ` 6,00,000 as collateral security) |
|
|
|
|
|
|
|
|
|
|
|
Posting in the Company's Balance Sheet
|
Best Barcode Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
2.
Non-Current Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
5,00,000 |
|
3. Current
Liabilities |
|
|
|
Total |
|
5,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
5,00,000 |
|
Total |
|
5,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
|
Secured: |
|
|
|
|
Loan
(Secured by issue of 9% Debentures of `
6,00,000 as Collateral Security) |
5,00,000 |
|
|
|
9% Debentures
(Issued as Collateral Security to Bank against loan) |
6,00,000 |
|
|
|
Less: Debenture Suspense Account |
6,00,000 |
- |
|
|
|
5,00,000 |
|
|
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
5,00,000 |
|
|
|
|
|
|
Question 29:
X Ltd. took a
loan of `
3,00,000 from IDBI Bank . The company issued 4,000; 9% Debentures of `
100 each as a collateral security for the same . Show how these items will be
presented in the Balance Sheet of the company. (AI 2010)
Answer:
When
Debentures Issued as Collateral Security
is shown separately
|
X Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
2.
Non-Current Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
3,00,000 |
|
3. Current
Liabilities |
|
|
|
Total |
|
3,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.Non-Current
Assets |
|
|
|
2.Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
3,00,000 |
|
Total |
|
3,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
|
Secured: |
|
|
|
|
Loan
From IDBI(Secured by issue of Debentures of ` 4,00,000) |
3,00,000 |
|
|
|
9 %
Debentures (Issued as Collateral Security against loan) |
4,00,000 |
|
|
|
Less: Debenture Suspense Account |
4,00,000 |
- |
|
|
|
3,00,000 |
|
|
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
|
Cash at Bank |
3,00,000 |
|
|
|
|
|
|
Alternative Method: When Debentures Issued as Collateral
Security are not shown separately
|
X Ltd. |
||
|
Balance Sheet |
||
|
Particulars |
Note No. |
(`) |
|
I. Equity and Liabilities |
|
|
|
1.
Shareholders’ Funds |
|
|
|
2.
Non-Current Liabilities |
|
|
|
a. Long-Term
Borrowings |
1 |
3,00,000 |
|
3.Current
Liabilities |
|
|
|
Total |
|
3,00,000 |
|
|
|
|
|
II. Assets |
|
|
|
1.
Non-Current Assets |
|
|
|
2. Current
Assets |
|
|
|
a. Cash and
Cash Equivalents |
2 |
3,00,000 |
|
Total |
|
3,00,000 |
NOTES TO ACCOUNTS
|
Note No. |
Particulars |
(`) |
|
|
|
|
|
1 |
Long-Term Borrowings |
|
|
|
Secured: |
|
|
|
Loan From
IDBI (Secured by issue of 9% Debentures of ` 4,00,000 as Collateral Security) |
3,00,000 |
|
|
|
|
|
2 |
Cash and Cash Equivalents |
|
|
|
Cash at Bank |
3,00,000 |
|
|
|
|
Question 30:
S. Singh Limited obtained a loan of ` 5,00,000 from
State Bank of India @ 10% p.a. interest. The company issued ` 7,50,000, 10%
Debentures of ` 100 each in favour
of State Bank of India as Collateral Security. Pass necessary Journal entries
for the above transactions:
(i) When company decided not to record the issue of
10% Debentures as Collateral Security.
(ii) When company decided to record the issue of 10% Debentures as Collateral
Security. (Sample Paper 2018-19)
Answer:
(i) When company decided not to record the
issue of 10% debentures as Collateral Security
|
In the books of S. Singh Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
|
Bank A/c |
Dr. |
|
5,00,000 |
|
|
|
To Bank Loan A/c |
|
|
|
5,00,000 |
|
|
(Being bank loan taken from State Bank of India @10% p.a.
interest) |
|
|
|
|
(ii) When company decided to record the issue of 10% debentures as
Collateral Security
|
In the books of S. Singh Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
Debit (`) |
Credit (`) |
|
|
Bank A/c |
Dr. |
|
5,00,000 |
|
|
|
To Bank Loan A/c |
|
|
|
5,00,000 |
|
|
(Being bank loan taken from State Bank of India @10% p.a.
interest) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures Suspense A/c |
Dr. |
|
7,50,000 |
|
|
|
To 10% Debentures A/c |
|
|
|
7,50,000 |
|
|
(Being 7,500, 10% Debentures issued as collateral
security) |
|
|
|
|
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Ts Grewal Solution 2022-2023
Class 12 / Volume – 2
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