Question 51: 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 RahaLtd. |
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|
Journal |
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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) |
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|
|
|
|
|
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 |
|
|
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To Premium on redemption of debenture A/c |
|
|
30,000 |
|
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(Being
issued 6,000; 8% Debentures of ` 100 each, redeemable at a premium of 5% payable along with application) |
|
|
|
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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) |
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Question 52:
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 |
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|
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. |
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|
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 |
||
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|
|
|
|
|
|
||
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|
90,000 |
|
|
90,000 |
||
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Question
53:
Garvit Ltd.
invited applications for issuing 3,000, 11% Debentures of 100 each at a
discount of 6%. Thefull amount was payable on
application. Applications were received for 3,600 debentures. Applications
for600 debentures were rejected and the application money was refunded.
Debentures were allotted to theremaining applicants.
Pass the necessary Journal entries for the above
transactions, including writing off the Discount on Issueof
Debentures, in the books of Garvit Ltd.
Answer:
|
In the books of Garvit
Ltd. Journal |
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|
Date |
Particulars |
|
L.F. |
Debit |
Credit |
|
2018 |
|
|
|
|
|
|
April 01 |
Bank
A/c (3,600 × 94) |
Dr. |
|
3,38,400 |
|
|
|
To Debentures Application & Allotment A/c
(3,600 × 94) |
|
|
|
3,38,400 |
|
|
(Being
application money received on 11% Debentures issued at 6%) |
|
|
|
|
|
|
|
|
|
|
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|
April 01 |
Debentures
Application & Allotment A/c |
Dr. |
|
3,38,400 |
|
|
|
Discount
on Issue of Debentures A/c (3,000×4) |
Dr. |
|
18,000 |
|
|
|
To 11% Debentures A/c (3,000×100) |
|
|
|
3,00,000 |
|
To Bank A/c (600×94) |
56,400 |
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|
|
(Being
application & allotment money adjusted) |
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|
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|
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|
|
|
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|
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31
March 19 |
Securities
Premium Reserve A/c |
Dr. |
|
10,000 |
|
|
|
Statement
of Profit & Loss A/c |
Dr. |
20,000 |
|
|
|
|
To Loss on Issue of Debentures A/c |
|
|
|
30,000 |
|
|
(Being
loss on issue of debentures written off) |
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|
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Question 54:
On
1st June, 2023, R Energy Ltd. issued 10,000, 7% Debentures of `
100 each at a discount of 10% redeemable at a premium of 10% at the end of five
years. All the debentures were subscribed and allotment was made.
Prepare
the Balance Sheet (extract) as at 31st March, 2024.
Answer:
|
In the books of R Energy Ltd. An Extract of Balance Sheet As at 31st March, 2024 |
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|
Particulars |
Note No. |
(`) |
|||
|
I. EQUITIES AND LIABILITIES |
|
|
|||
|
1. Shareholders’ Funds |
|
|
|||
|
Reserves and Surplus |
3 |
(2,00,000) |
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2. Non-Current Liabilities |
|
|
|||
|
a. Long-term Borrowings |
1 |
10,00,000 |
|||
|
b. Other long-term Liabilities |
2 |
1,00,000 |
|||
|
|
|
|
|||
|
Total |
|
9,00,000 |
|||
|
|
|
|
|||
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II. Assets |
|
|
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|
Current Assets |
|
|
|||
|
Cash and Cash Equivalents |
4 |
9,00,000 |
|||
|
|
|
|
|||
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Total |
|
9,00,000 |
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|
Notes to Accounts: |
|||||
|
Note |
Particulars |
|
(`) |
||
|
1. |
Long-term Borrowings |
|
|
||
|
|
10,000,
7% Debentures of `100
each issued at |
|
10,00,000 |
||
|
|
|
|
|
||
|
2. |
Other long-term Liabilities |
|
|
||
|
|
Premium
on Redemption of Debentures |
|
1,00,000 |
||
|
|
|
|
|
||
|
3. |
Reserves and Surplus |
|
|
||
|
|
Statement
of Profit & Loss |
|
|
||
|
|
Less: Loss on Issue of Debentures
written off |
(2,00,000) |
(2,00,000) |
||
|
|
|
|
|
||
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4. |
Cash and Cash Equivalents |
|
|||
|
|
On
7% debentures @ `
90 each (10,000 × 90) |
9,00,000 |
|||
Question 55:
On
1st April, 2023, Solar Power Ltd. issued 10,000, 8% Debentures of ` 100 each at a discount of 5% redeemable at a premium
of 15% at the end of five years. All the debentures were subscribed and
allotment was made. The company had balance in Securities Premium Reserve of ` 80,000.
Prepare the Balance Sheet (extract) as at 31st March, 2024.
Answer:
|
In the books of Solar Power Ltd. An Extract of Balance Sheet As at 31st March, 2024 |
||
|
Particulars |
Note |
(`) |
|
I. EQUITIES AND LIABILITIES |
|
|
|
1. Shareholders’ Funds |
|
|
|
Reserves and Surplus |
3 |
(1,20,000) |
|
2. Non-Current Liabilities |
|
|
|
a. Long-term Borrowings |
1 |
10,00,000 |
|
b. Other long-term Liabilities |
2 |
1,50,000 |
|
Total |
|
|
|
|
|
|
|
II. Assets |
|
|
|
Current Assets |
|
|
|
Cash and Cash Equivalents |
4 |
9,50,000 |
|
|
|
|
|
Total |
|
|
|
Notes to Accounts: |
|||
|
Note |
Particulars |
(`) |
|
|
1. |
Long-term Borrowings |
|
|
|
|
10,000,
8% Debentures of `100
each issued |
|
10,00,000 |
|
|
|
|
|
|
2. |
Other long-term Liabilities |
|
|
|
|
Premium
on Redemption of Debentures |
|
1,50,000 |
|
|
|
|
|
|
3. |
Reserves and Surplus |
|
|
|
|
Securities
Premium Reserve |
80,000 |
|
|
|
Less: Loss on Issue of Debentures
written off |
(80,000) |
|
|
|
Statement
of Profit and Loss |
– |
|
|
|
Less: Loss on Issue of Debentures
written off |
(1,20,000) |
(1,20,000) |
|
|
|
|
|
|
4. |
Cash and Cash Equivalents |
|
|
|
|
On
8% debentures @ `
95 each (10,000 × 95) |
|
9,50,000 |
Ts Grewal Solution 2024-2025
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Class 12 / Volume – 2