Class 12 Accountancy Chapter 9- Issue of Debentures

TS Grewal Solutions for Class 12 Accountancy Vol 2 Chapter 9

TS Grewal Solutions for Class 12 Accountancy Chapter 9- Issue of Debentures is an elementary concept to be learned by the students. Click here to learn more about TS Grewal Accountancy solutions for class 12 in a simple and a step by step method, which is beneficial for the students to score well in their upcoming board exams.

Board CBSE
Class Class 12
Subject Accountancy
Chapter Chapter 9
Chapter Name Issue of Debentures
Number of questions solved 07
Category TS Grewal

TS Grewal Solutions for Class 12 Accountancy Chapter 9 – Issue of Debentures

Question 1

X company issued 4,000; 10% debentures of ₹. 100/- each, payable ₹. 20/- on the application and balance amount on the allotment. The debentures are redeemable after 5 years. Applications were received for the issued debentures and allotment was made to all the applicants. The amount was received on due dates.

Pass the necessary journal entries.

Solution:

JOURNAL

Date Particulars L.F. Dr (₹)

Cr (₹)

Bank a/c Dr.

To Debentures application a/c

(Being the application money received on 4,000; 10% debentures @ ₹. 20/ debenture)

80,000 80,000
Debenture application a/c Dr.

To 10% debentures a/c

(Being the allotment of 4,000; 10% debentures of ₹. 100 each)

80,000 80,000
Debenture allotment a/c Dr.

To 10% debentures a/c

(Being the amount due on 4,000; 10% debentures on allotment @ ₹.80/- debenture)

3,20,000 3,20,000
Bank a/c Dr.

Debenture allotment a/c

(Being the amount received against allotment)

3,20,000 3,20,000

Question 2

Axe Ltd. issued 20,000; 9% debentures of ₹. 100/- each at a discount of 4% on 1st April 2018, payable ₹. 30/- on the application and the balance on the allotment. The debentures are redeemable after 5 years. Pass the necessary journal entries.

Solution:

JOURNAL

Date Particulars L.F. Dr (₹)

Cr (₹)

2018 April 1 Bank a/c Dr.

To Debentures application a/c

(Being the application money on 20,000; 9% debentures @ ₹. 30/- each received)

6,00,000 6,00,000
Debentures application a/c Dr.

To 9% debentures

(Being the debentures application money transferred to 9% debenture a/c)

6,00,000 6,00,000
Debenture allotment a/c Dr.

Discount on issue of debentures a/c Dr.

To 9% debentures a/c

(Being the allotment money due on 20,000; 9% debentures)

13,20,000

80,000

14,00,000
Bank a/c Dr.

To Debenture allotment a/c

(Being the amount received on allotment)

13,20,000 13,20,000

Question 3

Titan Watches Ltd. issued 7,500, 8% debentures of ₹. 100/- each at par for a subscription payable along with the applications. The subscription was received for 7,000 debentures. The debentures were duly allotted. Pass the journal entries.

Solution:

In the books of Titan Watches Ltd.

JOURNAL

Date Particulars L.F. Dr (₹)

Cr (₹)

Bank a/c Dr.

To debentures application and allotment a/c

(Being the applications received for 7,000; 8% debentures @ ₹. 100/- debenture)

7,00,000 7,00,000
Debentures application and allotment a/c Dr.

To 8% debentures a/c

(Being 7,000; 8% debentures of ₹. 100/- each alloted)

7,00,000 7,00,000

Question 4

Hibiscus Ltd. purchased a piece of land from JNR Ltd. and paid the consideration as follows:

  • Issued a cheque for ₹. 10,00,000/-
  • Issued a bill exchange for 3 months for ₹. 5,00,000/-
  • Issued 5,000; 9% Debentures of ₹. 100/- each at par redeemable at 10% premium after 5 years.

Pass the journal entry.

Solution:

Date Particulars L.F. Dr (₹) Cr (₹)
Land a/c Dr.

Loss on the issue of debentures a/c Dr.

To Bank a/c

To Bills Payable a/c

To 9% Debentures a/c

To premium on redemption of debentures a/c

(Being the land purchased and consideration paid)

20,00,000

50,000

10,00,000

5,00,000

5,00,000

50,000

Question 5

V Ltd. issued 5,000; 9% debentures of ₹. 100/- each at par and also raised a loan of ₹. 80,000/- from the bank, collaterally secured by ₹. 1,00,000/-; 9% debentures. How will be the debentures shown in the balance sheet of the company assuming that the company has passed journal entry for the issue of debentures as collateral security in the books?

Solution:

An Extract of Balance Sheet of V Ltd. as at

Particulars Note No.

  1. EQUITY AND LIABILITIES

Non-Current Liabilities

Long-term Borrowings

1 5,80,000

Note to Accounts

  1. Long-term Borrowings

5,000; 9% debentures of ₹.100/- each

Loan from bank

1,000; 9% debentures of ₹. 100/- each issued as

Collateral Security

Less: Debentures Suspense a/c

1,00,000

1,00,000

5,00,000

80,000

5,80,000

Question 6

Debentures are shown in the Balance Sheet of a firm below the head of,

  • Non-current liabilities
  • Current liabilities
  • Share capital
  • None of these

Answer: Non-current liabilities

Question 7

Debentureholders are,

  • Owners of the company
  • Lenders of the company
  • Vendors of the company
  • Customers of the company

Answer: Lenders of the company

The above-provided solutions are considered to be the best solution for ‘TS Grewal Solutions for Class 12 Accountancy Chapter 9- Issue of Debentures’. Stay tuned to BYJU’S to learn more and score well in the upcoming board examinations.