commercemine.com

12th | Company Accounts- Issue of Debentures| Question No.  41 To 45 | Ts Grewal Solution 2022-2023

Question 41:


Mercury limited company issued `1,00,000, 9% Debentures at a discount of 6% on 1st April, 2022. These debentures are to be redeemed equally, spread over 5 annual installments.

Pass the Journal entries for issue of debentures and writing off the discount.

Answer:


In the books of S. Singh Ltd.

Journal

Date

Particulars

 

L.F.

Debit (`)

Credit (`)

2022

 

 

 

 

 

April 01

Bank A/c

Dr.

 

94,000

 

 

  To Debentures Application & Allotment A/c

 

 

 

94,000

 

(Being application money received on 9% Debentures issued at 6% discount)

 

 

 

 

 

 

 

 

 

 

April 01

Debentures Application & Allotment A/c

Dr.

 

94,000

 

 

Discount on Issue of Debentures A/c

Dr.

 

6,000

 

 

  To 9% Debentures A/c

 

 

 

1,00,000

 

(Being application & allotment money adjusted)

 

 

 

 

2023

 

 

 

 

 

March 31

Statement of Profit & Loss A/c

Dr.

 

6,000

 

 

  To Discount on Issue of Debentures A/c

 

 

 

6,000

 

(Being discount on issue of debentures written off)

 

 

 

 

 

Question 42:   Gladiators Ltd. issued 10,000; 8% Debentures of ` 100 each at a discount of 5%, redeemable at a premium of 5% payable along with application. It had balance of ` 70,000 in Securities Premium Reserve and ` 50,000 in Capital Reserve. The debentures were fully subscribed and amounts were duly received.


Pass the necessary Journal entries for issue of debentures and writing off Loss on Issue of Debentures.

Answer:


Books of Gladiators Ltd.

Journal

Date

Particular

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

9,50,000

 

 

 To Debenture Application A/c

 

 

9,50,000

 

(Being Application Money received for 10,000 debenture for `95)

 

 

 

 

Debenture Application A/c                       Dr.

 

9,50,000

 

 

Discount on issue of Debenture A/c          Dr.

 

50,000

 

 

Loss on Redemption on Debenture A/c     Dr.

 

50,000

 

 

 To 8% Debenture A/c

 

 

10,00,000

 

 To Premium on redemption of debenture A/c

 

 

50,000

 

(Being issued 10,000; 8% Debentures of ` 100 each at a discount of 5%, redeemable at a premium of 5% payable along with application)

 

 

 

 

Securities Premium Reserve A/c               Dr.

 

70,000

 

 

Capital Reserve A/c                                 Dr.

 

30,000

 

 

 To Discount on issue of Debenture A/c

 

 

50,000

 

 To Loss on Redemption on Debenture A/c

 

 

50,000

 

(Being Discount on issue of Debenture and Loss on Redemption on Debenture written off)

 

 

 

 

Question 43:   DB Ltd. issued 20,000; 7% Debentures of ` 100 each at a discount of 10% redeemable at a premium of 10% payable ` 50 on application and balance on allotment. It had balance in Securities Premium Reserve of `1,50,000 and in Capital Reserve of  `1,00,000.


The debentures were fully subscribed and amounts were duly received.

 

Pass the Journal entries for issue of Debentures and writing off loss on Issue of Debentures.

Answer:


Books of DB Ltd.

Journal

Date

Particular

L.F.

Debit

`

Credit

`

 

Bank A/c

Dr.

 

18,00,000

 

 

 To Debenture Application A/c

 

 

18,00,000

 

(Being Application Money received for 20,000 debenture for `90)

 

 

 

 

Debenture Application A/c                       Dr.

 

18,00,000

 

 

Discount on issue of Debenture A/c          Dr.

 

2,00,000

 

 

Loss on Redemption on Debenture A/c     Dr.

 

2,00,000

 

 

 To 7% Debenture A/c

 

 

20,00,000

 

 To Premium on redemption of debenture A/c

 

 

2,00,000

 

(Being issued 20,000; 7% Debentures of ` 100 each at a discount of 10%, redeemable at a premium of 10% payable along with application)

 

 

 

 

Securities Premium Reserve A/c              Dr.

 

1,50,000

 

 

Capital Reserve A/c                                 Dr.

 

1,00,000

 

 

Statement of Profit and loss A/c               Dr.

 

1,50,000

 

 

 To Discount on issue of Debenture A/c

 

 

2,00,000

 

 To Loss on Redemption on Debenture A/c

 

 

2,00,000

 

(Being Discount on issue of Debenture and Loss on Redemption on Debenture written off)

 

 

 

 

Question 44:   On 1st January, 2018, Raha Ltd. issued 6,000, 8% Debentures of nominal (face) value of ` 100 each redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years. It has a balance of ` 10,000 in Securities Premium Reserve.


 

Pass Journal entries. Also give Journal entries for writing off Loss on Issue of Debentures.

Answer:


Books of Raha Ltd.

Journal

Date

Particular

L.F.

Debit

`

Credit

`

2018

1st January

 

Bank A/c

 

Dr.

 

 

6,00,000

 

 

 To Debenture Application A/c

 

 

6,00,000

 

(Being Application Money received for 6,000 debenture for `100)

 

 

 

 

Debenture Application A/c                      Dr.

 

6,00,000

 

 

Loss on Redemption on Debenture A/c    Dr.

 

30,000

 

 

 To 8% Debenture A/c

 

 

6,00,000

 

 To Premium on redemption of debenture A/c

 

 

30,000

 

(Being issued 6,000; 8% Debentures of ` 100 each, redeemable at a premium of 5% payable along with application)

 

 

 

2018

31 March

 

Securities Premium Reserve A/c              Dr.

 

 

10,000

 

 

Statement of Profit and loss A/c               Dr.

 

20,000

 

 

 To Loss on Redemption on Debenture A/c

 

 

30,000

 

(Being Discount on issue of Debenture and Loss on Redemption on Debenture written off)

 

 

 

 

Question 45:


Global Ltd. issued 10,000, 8% Debentures of  ` 100 each redeemable in four equal instalments by draw of lots from the end of 3 years at a premium of ` 9.
Pass the Journal entries for writing off the Loss on Issue of Debentures. Also prepare Loss on issue of Debentures Account.

Answer:


In the books of Raha Ltd.

Journal

Date

Particulars

 

L.F.

Debit
(
`)

Credit
(
`)

By the end of year of Allotment

Statement of Profit & Loss A/c

Dr.

 

90,000

 

  To Loss on Issue of Debentures A/c

 

 

 

90,000

(Being loss on issue of debentures written off)

 

 

 

 

 

Dr.

Loss on Issue of Debentures A/c

Cr.

Date

Particulars

 (`)

Date

Particulars

 (`)

On the date of Issue

To 8% Debentures A/c

90,000

By the end of Year of allotment

By Statement of Profit & Loss A/c

90,000

 

 

 

 

 

 

 

 

90,000

 

 

90,000

 

 

 

 

 

 

 

Click below for more Questions

Ts Grewal Solution 2022-2023

Class 12 / Volume – 2

Click on below links for 

12th TS Grewal’s Accountancy Solutions

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021