Question 46:
Suzlon Ltd. issued on 1st July, 2023, 20,000, 7%
Debentures of `100
each for subscription at 10% premium payable `40 on application; `40 (including premium) on allotment and balance on
first and final call. The debentures were subscribed and allotted. The company
has not made first and final call during the year ended 31st March, 2024.
Interest was payable on 31st March each year.
Pass the Journal entry
for issue of debentures and interest for the year ended 31st March, 2024 and
transfer the interest to Statement of Profit & Loss.
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Books of Suzlon Ltd. |
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Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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2023 1st July |
Bank
A/c |
Dr. |
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8,00,000 |
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To 7% Debenture
Application A/c |
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8,00,000 |
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(Debenture
application money received for 20,000 debentures at ` 40 each) |
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1st July |
7%
Debenture Application A/c |
Dr. |
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8,00,000 |
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To 7% Debentures A/c |
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8,00,000 |
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(Debenture
application money transferred to 7% Debentures A/c) |
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7%
Debenture Allotment A/c |
Dr. |
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8,00,000 |
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To 7% Debentures A/c |
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6,00,000 |
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To Securities Premium
A/c |
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2,00,000 |
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(Debenture
allotment due on 20,000 7% Debentures at ` 40 including premium of ` 10) |
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Bank
A/c |
Dr. |
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8,00,000 |
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To 7% Debentures
Allotment A/c |
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8,00,000 |
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(Debenture
allotment money received) |
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31-3-2024 |
Debenture Interest A/c |
Dr. |
73,500 |
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To Debenture
Holders’ A/c |
73,500 |
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(Being interest allowed on debenture for 9 months) |
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31-3-2024 |
Debenture Holders’ A/c Dr. |
73,500 |
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To Bank A/c |
73,500 |
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(Being interest paid) |
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31-3-2024 |
Statement of P&L A/c Dr. |
73,500 |
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To Debenture
Interest A/c |
73,500 |
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(Being Debenture Interest transferred to Statement
P&L) |
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Working note:
Value of debenture = 14,00,000
7% Interest on
Debenture for nine months = (14,00,000×7×9)÷(100×12)= 73,500
Question 47:
Kitply Ltd. issued `2,00,000,
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:
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In the books of Kitply
Ltd. Journal |
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Date |
Particulars |
L.F. |
Debit ` |
Credit ` |
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1
April |
Bank
A/c |
Dr. |
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1,90,000 |
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To
10% Debenture Application A/c |
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1,90,000 |
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(Debenture
application money received at 5% discount) |
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1
April |
10%
Debenture Application A/c |
Dr. |
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1,90,000 |
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Discount
on Issue of Debentures A/c |
Dr. |
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10,000 |
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To
10% Debentures A/c |
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1,00,000 |
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(Debenture
of `2,00,000 issued at 5% Discount with the term payable
at 10% premium) |
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31March |
Securities
premium reserve A/c Dr. |
10,000 |
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To Discount on Issue of Debentures A/c |
10,000 |
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(Discountwritten-off) |
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Question 48:
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:
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In the books of S. Singh Ltd. Journal |
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Date |
Particulars |
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L.F. |
Debit (`) |
Credit (`) |
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2022 |
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April 01 |
Bank
A/c |
Dr. |
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94,000 |
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To Debentures Application & Allotment A/c |
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94,000 |
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(Being
application money received on 9% Debentures issued at 6% discount) |
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April 01 |
Debentures
Application & Allotment A/c |
Dr. |
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94,000 |
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Discount
on Issue of Debentures A/c |
Dr. |
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6,000 |
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To 9% Debentures A/c |
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1,00,000 |
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(Being
application & allotment money adjusted) |
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2023 |
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March 31 |
Statement
of Profit & Loss A/c |
Dr. |
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6,000 |
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To Discount on Issue of Debentures A/c |
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6,000 |
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(Being
discount on issue of debentures written off) |
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Question
49:
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:
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Books of Gladiators Ltd. |
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Journal |
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Date |
Particular |
L.F. |
Debit ` |
Credit ` |
|
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|
Bank
A/c |
Dr. |
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9,50,000 |
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To Debenture Application A/c |
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9,50,000 |
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(Being
Application Money received for 10,000 debenture for `95) |
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Debenture Application A/c Dr. |
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9,50,000 |
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Discount on issue of Debenture A/c Dr. |
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50,000 |
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Loss on Redemption on Debenture A/c Dr. |
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50,000 |
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To 8% Debenture A/c |
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10,00,000 |
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To Premium on redemption of debenture A/c |
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50,000 |
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(Being
issued 10,000; 8% Debentures of ` 100 each at a discount of 5%, redeemable at a premium of 5% payable
along with application) |
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Securities Premium Reserve A/c Dr. |
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70,000 |
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Capital Reserve A/c Dr. |
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30,000 |
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To Discount
on issue of Debenture A/c |
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50,000 |
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To Loss on
Redemption on Debenture A/c |
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50,000 |
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(Being Discount on issue of Debenture and Loss on
Redemption on Debenture written off) |
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Question 50:
Sujata Ltd. invited applications for issuing so,000, 99% Debentures of 100 each at a discount of 10% redeemable
at par after 5 years. The debentures were fully subscribed and all money was
duly received. The company had a balance of? 3,00,000
in Securities Premium which it decided to use for writing off the discountAoss on issue of debentures. It also decided to
write off the remaining discount/loss on issue of debentures in the first year.
Pass the Journal
entries for issue of debentures and for writing off discount/loss on issue of
debentures.
(CBSE 2020)
Answer:
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In the books of Sujata
Ltd. Journal |
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Date |
Particular |
L.F. |
Debit ` |
Credit ` |
|
|
Bank A/c |
Dr. |
|
45,00,000 |
|
|
|
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To
Debenture Application and Allotment A/c |
|
|
|
45,00,000 |
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(Being Application money received for 50,000
Debentures) |
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Debenture
Application and Allotment A/c |
Dr. |
|
45,00,000 |
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Discount
On Issue of debentures A/c |
Dr. |
5,00,000 |
|||
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To
9% Debentures A/c |
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50,00,000 |
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(50,000; 9% Debentures issued of `100 each at a Discount of 10% and redeemable at a
par) |
|
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Securities Premium A/c Dr. |
3,00,000 |
||||
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Statement of Profit and Loss Dr. |
2,00,000 |
||||
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To Discount
On Issue of debentures A/c |
5,00,000 |
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(Being Discount On Issue of debentures is written
off in first year) |
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Ts Grewal Solution 2024-2025
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Class 12 / Volume – 2