Question 56: On 1st
April, 2019. Mathew Ltd. issued 10,000, 9% Debentures of ` 100 each at a discount of 5%,
redeemable at a premium of 5%. These debentures were redeemable as follows:
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On
31st March, 2020 |
2,000 Debentures; |
|
On
31st March, 2021 |
5,000 Debentures; |
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On
31st March, 2022 |
3,000 Debentures. |
Prepare
the Loss on Issue of Debentures Account, Debentures Account and Premium on
Redemption of Debentures Account for three years.
Answer:
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In the books of Mathew Ltd. |
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Dr. |
Loss on Issue of Debentures A/c |
Cr. |
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Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
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2019 |
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2020 |
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April 01 |
To
9% Debentures A/c |
1,00,000 |
March 31 |
By
Statement of Profit & Loss A/c |
1,00,000 |
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1,00,000 |
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1,00,000 |
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Dr. |
9% Debentures A/c |
Cr. |
|||||
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Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
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|
2020 |
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|
2019 |
|
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March 31 |
To
Debentureholder’s A/c |
2,00,000 |
April 01 |
By
Debenture Application & Allotment A/c |
9,50,000 |
||
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March 31 |
To
balance c/d |
8,00,000 |
April 01 |
By
Loss on Issue of Debentures A/c |
50,000 |
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10,00,000 |
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10,00,000 |
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2021 |
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|
2020 |
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March 31 |
To
Debentureholder’s A/c |
5,00,000 |
April 01 |
By
balance b/d |
8,00,000 |
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March 31 |
To
balance c/d |
3,00,000 |
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8,00,000 |
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8,00,000 |
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2022 |
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2021 |
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March 31 |
To
Debentureholder’s A/c |
3,00,000 |
April 01 |
By
balance b/d |
3,00,000 |
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3,00,000 |
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3,00,000 |
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Dr. |
Premium on Redemption of Debentures A/c |
Cr. |
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|
Date |
Particulars |
(`) |
Date |
Particulars |
(`) |
||
|
2020 |
|
|
2019 |
|
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|
March 31 |
To
Debentureholder’s A/c
|
10,000 |
April 01 |
By
Loss on Issue of Debentures A/c |
50,000 |
||
|
March 31 |
To
balance c/d |
40,000 |
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50,000 |
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|
50,000 |
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2021 |
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2020 |
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March 31 |
To
Debentureholder’s A/c |
25,000 |
April 01 |
By
balance b/d |
40,000 |
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March 31 |
To
balance c/d |
15,000 |
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40,000 |
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|
40,000 |
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2022 |
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|
2021 |
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March 31 |
To
Debentureholder’s A/c |
15,000 |
April 01 |
By
balance b/d |
15,000 |
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15,000 |
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15,000 |
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Question 57:
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:
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Books of Dev Ltd. |
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Journal |
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Date |
Particular |
L.F. |
Debit ` |
Credit ` |
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|
Assets
A/c |
Dr. |
|
10,00,000 |
|
|
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To Amrit Ltd.’s A/c |
|
|
7,50,000 |
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To Liabilities A/c |
2,50,000 |
||||
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(Being
acquired
running business) |
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Amrit Ltd.’s A/c Dr. |
|
7,50,000 |
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To 9% Debentures A/c
(6,250×100) |
6,25,000 |
||||
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To Securities Premium
A/c (6,250×20) |
1,25,000 |
||||
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(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) |
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Bank A/c Dr. |
|
10,00,000 |
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To
Debenture Application and Allotment A/c |
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|
10,00,000 |
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(Application money received) |
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Debenture
Application and Allotment A/c Dr. |
|
10,00,000 |
|
|
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Loss
On Issue of debentures A/c Dr. |
|
2,00,000 |
|
|
|
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To
8% Debentures A/c |
|
|
10,00,000 |
|
|
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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) |
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Securities
Premium A/c Dr. |
|
1,25,000 |
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|
Statement of Profit & Loss Dr. |
|
75,000 |
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To Loss On Issue of debentures A/c |
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|
2,00,000 |
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(Being Loss
On Issue of debentures written off) |
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Question 58:
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, 2022, 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, 2023 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.
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Date |
Particular |
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L.F. |
Debit ` |
Credit ` |
|||
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|
Bank A/c |
Dr. |
|
1,65,00,000 |
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|||
|
1.7.2022 |
To
Debenture Application and Allotment A/c |
|
|
|
1,65,00,000 |
|||
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|
(Application money received) |
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|
1.7.2022 |
Debenture
Application and Allotment A/c |
Dr. |
|
1,65,00,000 |
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|||
|
|
Loss
On Issue of debentures A/c |
Dr. |
|
37,50,000 |
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|||
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To
7% Debentures A/c (75,000×200) |
|
|
|
1,50,00,000 |
|||
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To
Securities
Premium Reserve A/c (75,000×20) |
|
|
|
15,00,000 |
|||
|
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To
Premium on Redemption of debentures A/c |
|
|
|
37,50,000 |
|||
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|
(Being 10,000, 8% Debentures issued for `100 each redeemable at
premium of `20 per debenture) |
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|||
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31.3.2023 |
Securities
Premium A/c |
Dr. |
|
25,00,000 |
|
|||
|
|
Statement of Profit & Loss |
Dr. |
|
12,50,000 |
|
|||
|
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To Loss On Issue of debentures A/c |
|
|
|
37,50,000 |
|||
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|
(Being Loss
On Issue of debentures written off) |
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(ii) Prepare Loss on Issue of Debentures Account.
|
Dr. |
Loss on
Issue of Debentures Account |
Cr. |
|||
|
Date |
Particulars |
` |
Date |
Particulars |
` |
|
1.7.2022 |
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 ` |
|
30.09.2022 |
Interest on Debenture A/c |
Dr. |
|
3,32,500 |
|
|
|
To
Debenture Holders’s A/c |
|
|
|
3,32,500 |
|
|
(Being Interest due) |
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30.09.2022 |
Debenture Holders’s
A/c |
Dr. |
|
3,32,500 |
|
|
|
To Bank
A/c |
|
|
|
3,32,500 |
|
|
(Being Interest Paid) |
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31.03.2023 |
Interest on Debenture A/c |
Dr. |
|
5,95,000 |
|
|
|
To
Debenture Holders’s A/c |
|
|
|
5,95,000 |
|
|
(Being Interest due) |
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31.03.2023 |
Debenture Holders’s
A/c |
Dr. |
|
5,95,000 |
|
|
|
To Bank
A/c |
|
|
|
5,95,000 |
|
|
(Being Interest Paid) |
|
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|
31.03.2023 |
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) |
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Ts Grewal Solution 2024-2025
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Class 12 / Volume – 2