Question
36: Care Cosmetics Ltd. issued 50,000; 9%6
Debentures of `
10 each on 1st April, 2021 redeemable at a premium of 10% after 10 years.
According to the terms of issue, ` 4 is payable on application and
balance on allotment of debentures. Record necessary Journal entries regarding
issue of debentures.
Answer:
|
Books of Care Cosmetics Ltd. |
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Journal |
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Date |
Particular |
L.F. |
Debit ` |
Credit ` |
|
|
|
1-4-2021 |
Bank A/c |
Dr. |
|
2,00,000 |
|
|
|
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To Debenture
Application A/c |
|
|
2,00,000 |
|
|
|
|
(Being Application Money received for 50,000
debenture for `4)
|
|
|
|
|
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1-4-2021 |
Debenture Application A/c Dr. |
|
2,00,000 |
|
|
|
|
|
To
9% Debenture A/c |
|
|
2,00,000 |
|
|
|
|
(Being interest paid) |
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|
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|
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1-4-2021 |
Debenture Allotment A/c Dr. |
|
3,00,000 |
|
|
|
|
|
Loss on Redemption on Debenture A/c Dr. |
|
30,000 |
|
|
|
|
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To 9%
Debenture A/c |
|
|
3,00,000 |
|
|
|
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To Premium on
redemption of debenture A/c |
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|
30,000 |
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|
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(Being interest allowed on debenture) |
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Question 37: Agam Ltd. issued
40,000; 9% Debentures of ` 100
each on 1st April, 2021 at a discount of 10% redeemable at a premium of 10%. Assuming
that the interest was paid half yearly on 30th September and 31st March, give
Journal entries relating to debenture interest for the half year ended 31st
March, 2022.
Answer:
|
Books of Agam Ltd. |
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Journal |
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Date |
Particular |
L.F. |
Debit ` |
Credit ` |
|
|
|
1-9-2021 |
Debenture Interest A/c |
Dr. |
|
1,80,000 |
|
|
|
|
To Debenture
Holders’ A/c |
|
|
1,80,000 |
|
|
|
|
(Being interest allowed on debenture) |
|
|
|
|
|
|
1-9-2021 |
Debenture Holders’ A/c Dr. |
|
1,80,000 |
|
|
|
|
|
To
Bank A/c |
|
|
1,80,000 |
|
|
|
|
(Being interest paid) |
|
|
|
|
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31-3-2022 |
Debenture Interest A/c Dr. |
|
1,80,000 |
|
|
|
|
To Debenture
Holders’ A/c |
|
|
1,80,000 |
|
||
|
|
(Being interest allowed on debenture) |
|
|
|
|
|
|
31-3-2022 |
Debenture Holders’ A/c Dr. |
|
1,80,000 |
|
|
|
|
To
Bank A/c |
|
|
1,80,000 |
|
||
|
|
(Being interest paid) |
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31-3-2022 |
Statement of P&L A/c Dr. |
|
3,60,000 |
|
|
|
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To Debenture Interest A/c |
|
|
3,60,000 |
|
|
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|
(Being Debenture Interest transferred to
Statement P&L) |
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Question 38:
Bright Ltd. issued 5,000; 10% Debentures of ` 100 each on 1st April, 2021
. The issue was fully subscribed. According to the terms of issue,
interest on the debentures is payable half-yearly on 30th September and
31st March and the tax deducted at source is 10%.
Pass necessary journal entries related to the debenture interest for the year
ending 31st March, 2022 and transfer of interest on debentures of the year to
the Statement of Profit and Loss.
Answer:
|
Journal In the books of Bright Ltd. |
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Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2022 |
|
|
|
|
|
|
Mar. 31 |
Debentures Interest A/c |
Dr. |
|
25,000 |
|
|
|
To Debenture Holder’s A/c |
|
|
|
22,500 |
|
|
To Income Tax Payable A/c |
|
|
|
2,500 |
|
|
(Debentures interest due) |
|
|
|
|
|
|
|
|
|
|
|
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|
Debenture Holder’s A/c |
Dr. |
|
22,500 |
|
|
|
Income Tax Payable A/c |
|
|
2,500 |
|
|
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To Bank A/c |
|
|
|
25,000 |
|
|
(Interest on debentures paid) |
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Mar. 31 |
Statement of Profit & Loss A/c |
Dr. |
|
50,000 |
|
|
|
To Debentures Interest A/c |
|
|
|
50,000 |
|
|
(Interest transferred to profit and loss) |
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Question 39:
On 1st April, 2020,V.V.L.Ltd issued
1,000, 9% Debentures of ` 100 each at a discount of 6%, redeemable at a
premium of 10% after three years. Pass necessary journal entries for the issue
of debentures and debenture interest for the year ended 31st March, 2021,
assuming that interest is payable on 30th September and 31st March and the rate
of tax deducted at source is 10%. The company closes its books on 31st March
every year.
Answer:
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Journal |
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|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
2020 |
|
|
|
|
|
|
Apr. 01 |
Bank A/c |
Dr. |
|
94,000 |
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
94,000 |
|
|
(Money received on the issue of debentures) |
|
|
|
|
|
|
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|
|
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|
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|
Debenture Application and Allotment A/c |
Dr. |
|
94,000 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
16,000 |
|
|
|
To 9% Debentures A/c |
|
|
|
1,00,000 |
|
|
To Premium on Redemption of Debentures A/c |
|
|
|
10,000 |
|
|
(Debenture application and allotment money transferred to
Debentures A/c) |
|
|
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Sept 30 |
Debenture Interest A/c |
Dr. |
|
4,500 |
|
|
|
To Debenture holders’ A/c |
|
|
|
4,050 |
|
|
To TDS Payable A/c |
|
|
|
450 |
|
|
(Interest due) |
|
|
|
|
|
|
|
|
|
|
|
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|
Debenture holders’ A/c |
Dr. |
|
4,050 |
|
|
|
To Bank A/c |
|
|
|
4,050 |
|
|
(Payment of interest) |
|
|
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|
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|
|
|
|
|
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|
TDS Payable A/c |
Dr. |
|
450 |
|
|
|
To Bank A/c |
|
|
|
450 |
|
|
(Payment of tax) |
|
|
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2021 |
|
|
|
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|
Mar 31 |
Debenture Interest A/c |
Dr. |
|
4,500 |
|
|
|
To Debenture holders’ A/c |
|
|
|
4,050 |
|
|
To TDS Payable A/c |
|
|
|
450 |
|
|
(Interest due) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture holders’ A/c |
Dr. |
|
4,050 |
|
|
|
To Bank A/c |
|
|
|
4,050 |
|
|
(Payment of interest) |
|
|
|
|
|
|
|
|
|
|
|
|
|
TDS Payable A/c |
Dr. |
|
450 |
|
|
|
To Bank A/c |
|
|
|
450 |
|
|
(Payment of tax) |
|
|
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Question 40:
Kitply Ltd. issued T2,00,000,
10% Debentures at a discount of 5%. The terms of issue provide the repayment
at the end of 4 years. Kitply
Ltd. has a balance of 5,00,000 in Securities Premium
Reserve.
Pass the Journal entries for issue of debentures and writing off the
discount.
Answer:
|
In the books of Kitply
Ltd. Journal |
||||||
|
Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
||
|
1 April |
Bank A/c |
Dr. |
|
1,90,000 |
|
|
|
To 10% Debenture Application A/c |
|
|
1,90,000 |
|||
|
|
(Debenture application money received at 5% discount) |
|
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|
1 April |
10% Debenture Application A/c |
Dr. |
|
1,90,000 |
|
|
|
|
Discount on Issue of Debentures A/c |
Dr. |
|
10,000 |
|
|
|
|
To 10% Debentures A/c |
|
|
1,00,000 |
||
|
|
(Debenture of ` 2,00,000 issued at 5% Discount with the term
payable at 10% premium) |
|
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|
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|
31March |
Securities premium reserve A/c Dr. |
10,000 |
||||
|
To Discount on
Issue of Debentures A/c |
10,000 |
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|
(Discount written-off) |
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Ts Grewal Solution 2022-2023
Class 12 / Volume – 2
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12th TS Grewal’s Accountancy Solutions