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Standard XII

Accountancy

Interest on Capital Exceeds Profits

10,000 10

Question

10,000 10% Debentures of Rs 100 each out of 1,000 10% Debentures are redeemable within the 12 months of the date of Balance Sheet. They will be shown under _______________.

Short term borrowing

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Other current liabilities

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Trade payables

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Short term provisions

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Solution

The correct option is B Other current liabilities
If debentures are payable within a period of 12 months they will be considered as current liabilities. In current liabilities they will be shown under the sub head other current liabilities. Current liabilities are the liabilities which are payable within 12 months.

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Similar questions

Alka Ltd. issued 5,000, 10% Debentures of Rs 1,000 each at a discount of 10% redeemable at a preminum of 5% after 5 years. According to the terms of issue, Rs 500 was payable on application and the balance amount on allotment of debentures.

Record necessary journal entries regarding issue of 10% debentures.

Give journal entries for the issue of debentures in the following conditions.

I. Issued 2,000, $12 %$ debentures of Rs 100 each at par, redeemable also at par.

II. Issued 2,000, $12 %$ debentures of Rs 100 each at a discount of $12 %$ , redeemable at par.

III. Issued 2,000, $12 %$ debentures of Rs 100 each at a premium of $5 %$ , redeemable at par.

IV. Issued 2,000, $12 %$ debentures of Rs 100 each at par but redeemable at $5 %$ premium.

V. Issued 2,000, $12 %$ debentures of Rs 100 each at a discount of $2 %$ , redeemable at a premium of $5 %$ .

VI. Issued 2,000, $12 %$ debentures of Rs 100 each at a premium of $5 %$ , redeemable at a premium of $10 %$ .

A company issues the following debentures.

(i) 10,000, 12% debentures of Rs.100 each at par but redeemable at premium of 5% after 5 years;

(ii) 10,000, 12% debentures of Rs.100 each at a discount of 10% but redeemable at par after 5 years;

(iii) 5,000, 12% debentures of Rs.1,000 each at a premium of 5% but redeemable at par after 5 years;

(iv) 1,000, 12% debentures of Rs.100 each issued to a supplier of machinery costing Rs.95,000. The debentures are repayable after 5 years; and

(v) 300, 12% debentures of Rs.100 each as a collateral security to a bank which has advanced a loan of Rs. 25000 to the company for a period of 5 years.

pass the journal entries to record the

(i) issue of debewntures; and

(ii) repayment of debentures after the given period.

A company issues the following debentures:

(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;

(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;

(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;

(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and

(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.

Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

Q. A Ltd. had 3,000, 12% Redeemable Preference Shares of Rs. 100 each fully paid up. The company issued 25,000 equity shares of Rs. 10 each at par and 1,000, 14% Debentures of Rs. 100 each. The amount to be transferred to Capital Redemption A/c will be __________.

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