Question
56:
Pass necessary Journal entries relating to issue of Debentures and to write off
discount/loss on issue of debentures in the books of Dhatu
Ltd. in the following case
(i) 400, 11% Debentures of ₹1,000 each are issued at
10% discount and redeemable at par. Balance in Securities Premium Account is
₹50,000.
(ii)
500, 10% Debentures of ₹1,000 each are issued at 10% discount and
redeemable at a premium of 10%. Balance in Securities Premium Account is
₹75,000. (CBSE 2024)
Answer:
|
In the books of
Dhatu Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
(i) |
Bank A/c |
Dr. |
|
3,60,000 |
|
|
|
To
Debentures Application and Allotment A/c |
|
|
|
3,60,000 |
|
|
(Being Bing application money received for 400, 11%
debentures) |
|
|
|
|
|
|
Debentures Application and Allotment A/c |
Dr. |
|
3,60,000 |
|
|
|
Discount on Issue of Debenture A/c |
Dr. |
|
40,000 |
|
|
|
To 11%
Debentures A/c |
|
|
|
4,00,000 |
|
|
(Being 400, 11% Debentures of ₹1,000 each are
issued at 10% discount and redeemable at par.) |
|
|
|
|
|
|
Securities Premium A/c |
Dr. |
|
40,000 |
|
|
|
To Discount
on Issue of Debentures A/c |
|
|
|
40,000 |
|
|
(Being Discount on Issue of Debentures Written off) |
|
|
|
|
|
|
|
|
|
|
|
|
(ii) |
Bank A/c |
Dr. |
|
4,50,000 |
|
|
|
To
Debentures Application and Allotment A/c |
|
|
|
4,50,000 |
|
|
(Being Bing application money received for 400, 11%
debentures) |
|
|
|
|
|
|
Debentures Application and Allotment A/c |
Dr. |
|
4,50,000 |
|
|
|
Loss on Issue of Debenture A/c |
Dr. |
|
1,00,000 |
|
|
|
To 11%
Debentures A/c |
|
|
|
5,00,000 |
|
|
To Premium
on Redemption of Debentures A/c |
|
|
|
50,000 |
|
|
(Being 500, 10% Debentures of ₹1,000 each are
issued at 10% discount and redeemable at a premium of 10%.) |
|
|
|
|
|
|
Securities Premium |
Dr. |
|
75,000 |
|
|
|
Statement of Profit & Loss A/c |
Dr. |
|
25,000 |
|
|
|
To Loss on
Issue of Debenture A/c |
|
|
|
1,00,000 |
|
|
(Being Discount on Issue of Debentures Written off) |
|
|
|
|
Question
57:
Pass
necessary Journal entries relating to issue of Debentures and to write off
discount/loss on issue of debentures in the books of Srijan
Ltd. in the following cases:
(i) 900, 6% Debentures of ₹1,000 each are issued at 5%
discount and redeemable at par. Balance in Securities Premium Account is
₹50,000.
(ii)
700, 8% Debentures of ₹1,000 each are issued at 1 0% discount and
redeemable at a premium of 10%.
Balance
in Securities Premium Account is ₹1,00,000.
(CBSE 2024)
Answer:
|
In the books
of Dhatu Ltd. Journal |
|||||
|
Date |
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
(i) |
Bank A/c |
Dr. |
|
8,55,000 |
|
|
|
To
Debentures Application and Allotment A/c |
|
|
|
8,55,000 |
|
|
(Being application money received for 900, 6%
Debentures of ₹1,000 each are issued at 5% discount) |
|
|
|
|
|
|
Debentures Application and Allotment A/c |
Dr. |
|
8,55,000 |
|
|
|
Discount on Issue of Debenture A/c |
Dr. |
|
45,000 |
|
|
|
To 6%
Debentures A/c |
|
|
|
9,00,000 |
|
|
(Being application money transfer to debenture
account) |
|
|
|
|
|
|
Securities Premium A/c |
Dr. |
|
45,000 |
|
|
|
To Discount
on Issue of Debentures A/c |
|
|
|
45,000 |
|
|
(Being Discount on Issue of Debentures Written off) |
|
|
|
|
|
|
|
|
|
|
|
|
(ii) |
Bank A/c |
Dr. |
|
6,30,000 |
|
|
|
To
Debentures Application and Allotment A/c |
|
|
|
6,30,000 |
|
|
(Being Bing application money received for 400, 11%
debentures) |
|
|
|
|
|
|
Debentures Application and Allotment A/c |
Dr. |
|
6,30,000 |
|
|
|
Loss on Issue of Debenture A/c |
Dr. |
|
1,40,000 |
|
|
|
To 8%
Debentures A/c |
|
|
|
7,00,000 |
|
|
To Premium
on Redemption of Debentures A/c |
|
|
|
70,000 |
|
|
(Being debenture application and allotment money
transfer to 8% division account and loss on redemption of the debenture
recorded) |
|
|
|
|
|
|
Securities Premium |
Dr. |
|
1,00,000 |
|
|
|
Statement of Profit & Loss A/c |
Dr. |
|
40,000 |
|
|
|
To Loss on
Issue of Debenture A/c |
|
|
|
1,40,000 |
|
|
(Being Discount on Issue of Debentures Written off) |
|
|
|
|
Dev Ltd. acquired running business of Amrit Ltd. having assets of ₹10,00,000 and lablties of ₹2,50,000. 9%
Debentures of ₹100
each were issued for the acquisition of business at a premium of ₹20 per
debenture.
The company issued 10,000, 8% Debentures of ₹100 each
redeemable at premium of ₹20
per debenture after 5 years.
You are required to pass the Journal entries for the
above transactions.
Answer:
|
Books of Dev Ltd. |
|||||
|
Journal |
|||||
|
Date |
Particular |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Assets
A/c |
Dr. |
|
10,00,000 |
|
|
|
To Amrit Ltd.’s A/c |
|
|
7,50,000 |
|
|
To Liabilities A/c |
2,50,000 |
||||
|
|
(Being
acquired
running business) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amrit Ltd.’s A/c Dr. |
|
7,50,000 |
|
|
|
To 9% Debentures A/c
(6,250×100) |
6,25,000 |
||||
|
To Securities Premium
A/c (6,250×20) |
1,25,000 |
||||
|
|
(Being
9% Debentures 6,250 issued of ₹100
each at a
premium of ₹20 per debenture to Amrit Ltd. for taking over of assets costing ₹10,00,000
and liabilities of ₹ 2,50,000) |
|
|
|
|
|
|
|
|
|
||
|
|
Bank A/c
Dr. |
|
10,00,000 |
|
|
|
|
To
Debenture Application and Allotment A/c |
|
|
10,00,000 |
|
|
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture
Application and Allotment A/c Dr. |
|
10,00,000 |
|
|
|
|
Loss
On Issue of debentures A/c Dr. |
|
2,00,000 |
|
|
|
|
To
8% Debentures A/c |
|
|
10,00,000 |
|
|
|
To
Premium on Redemption of debentures A/c |
|
|
2,00,000 |
|
|
|
(Being 10,000, 8% Debentures issued for ₹100 each redeemable at premium of ₹20 per debenture) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Securities
Premium A/c Dr. |
|
1,25,000 |
|
|
|
|
Statement of Profit & Loss Dr. |
|
75,000 |
|
|
|
|
To Loss On Issue of debentures A/c |
|
|
2,00,000 |
|
|
|
(Being Loss
On Issue of debentures written off) |
|
|
|
|
|
|
|
|
|
|
|
Question 59
Fit India Ltd. has
paid-up share capital of ₹1,00,00,000
(divided into 5,00,000 Equity Shares of ₹20
each and 10,000, 7% Debentures of ₹200
each, On 1st July, 2024, it further issued 7% Debentures at a premium of 10%
redeemable at 25% premium to meet the long-term funds requirement of ₹1,65,00,000. The issue price was payable along with
application. Balance in Securities Premium Account after the issue of
debentures is ₹25,00,000. Loss for the
year ended 31st March, 2025 is ₹10,00,000.
You are required to:
(i)
Pass Journal entries for issue of Debentures.
(ii) Prepare Loss on
Issue of Debentures Account.
(iii) Pass Journal
entries for interest on debentures, if interest is payable on 30th September
and 31st March each year.
Answer:
(i) Pass Journal entries
for issue of Debentures.
|
|
|
|
|
|||||
|
|
|
|
|
|||||
|
Date |
Particular |
|
L.F. |
Debit ₹ |
Credit ₹ |
|||
|
|
Bank A/c |
Dr. |
|
1,65,00,000 |
|
|||
|
1.7.2024 |
To
Debenture Application and Allotment A/c |
|
|
|
1,65,00,000 |
|||
|
|
(Application money received) |
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
1.7.2024 |
Debenture
Application and Allotment A/c |
Dr. |
|
1,65,00,000 |
|
|||
|
|
Loss
On Issue of debentures A/c |
Dr. |
|
37,50,000 |
|
|||
|
|
To
7% Debentures A/c (75,000×200) |
|
|
|
1,50,00,000 |
|||
|
|
To
Securities
Premium Reserve A/c (75,000×20) |
|
|
|
15,00,000 |
|||
|
|
To
Premium on Redemption of debentures A/c |
|
|
|
37,50,000 |
|||
|
|
(Being 10,000, 8% Debentures issued for ₹100 each redeemable at premium of ₹20 per debenture) |
|
|
|
|
|||
|
|
|
|
|
|
|
|||
|
31.3.2024 |
Securities
Premium A/c |
Dr. |
|
25,00,000 |
|
|||
|
|
Statement of Profit & Loss |
Dr. |
|
12,50,000 |
|
|||
|
|
To Loss On Issue of debentures A/c |
|
|
|
37,50,000 |
|||
|
|
(Being Loss
On Issue of debentures written off) |
|
|
|
|
|||
(ii) Prepare Loss on Issue of Debentures Account.
|
Dr. |
Loss on Issue of Debentures Account |
Cr. |
|||
|
Date |
Particulars |
₹ |
Date |
Particulars |
₹ |
|
1.7.2024 |
To Premium on Redemption of debentures A/c |
37,50,000 |
31.3.2023 |
By Securities Premium A/c |
25,00,000 |
|
|
|
|
31.3.2023 |
By Statement of Profit & Loss |
12,50,000 |
|
|
|
37,50,000 |
|
|
37,50,000 |
(iii) Pass Journal entries
for interest on debentures, if interest is payable on 30th September and 31st
March each year.
|
Date |
Particular |
|
L.F. |
Debit ₹ |
Credit ₹ |
|
30.09.2024 |
Interest on Debenture A/c |
Dr. |
|
3,32,500 |
|
|
|
To
Debenture Holders’s A/c |
|
|
|
3,32,500 |
|
|
(Being Interest due) |
|
|
|
|
|
30.09.2024 |
Debenture Holders’s
A/c |
Dr. |
|
3,32,500 |
|
|
|
To Bank
A/c |
|
|
|
3,32,500 |
|
|
(Being Interest Paid) |
|
|
|
|
|
31.03.2024 |
Interest on Debenture A/c |
Dr. |
|
5,95,000 |
|
|
|
To
Debenture Holders’s A/c |
|
|
|
5,95,000 |
|
|
(Being Interest due) |
|
|
|
|
|
31.03.2024 |
Debenture Holders’s A/c |
Dr. |
|
5,95,000 |
|
|
|
To Bank
A/c |
|
|
|
5,95,000 |
|
|
(Being Interest Paid) |
|
|
|
|
|
31.03.2024 |
Statement of Profit and Loss |
Dr. |
|
9,27,500 |
|
|
|
To Interest
on Debenture A/c |
|
|
|
9,27,500 |
|
|
(Being Interest on Debenture transferred to
Statement of Profit and Loss) |
|
|
|
|
|
|
|
|
|
|
|
Ts Grewal Solution 2025-2026
Click below for more Questions
Class 12 / Volume – 2