Issued at Par and Redeemed at Par

Q.

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 $10\%$ .

Q.

B Ltd purchased assets of the book value of Rs.4, 00, 000 and took over the liability of Rs. 50, 000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs.3, 80, 000, be paid by issuing debentures of Rs.100 each

What Journal entries will be made in the following three cases, if debentures are issued

(a) at par

(b) at discount

(c) at premium of 10%
It was agreed that any fraction of debentures be paid in cash

Q.

A, B, C and D are partners sharing profits in the ratio of 3:3:2:2 respectively. D retires and A, B and C decide to share the future profit in the ratio of 3:2:1 Goodwill of the firm is valued at Rs 60, 000. Goodwill already appears in the books at Rs 4, 50, 000. The profits for the first year after D's retirement amount to Rs 12, 00, 000. Give the necessary journal entries to record goodwill and to distribute the profile. Show the calculations clearly.

Q. Y Ltd redeemed 4, 800, $12\%$ debentures of Rs 100 each which were issued at par, at 110 per cent by converting them into equity shares of Rs 10 each issued at a discount of $4\%$. Journalise.

Q. Z Ltd redeemed 2, 000, $12\%$ debentures of Rs 100 each which were issued at a discount of $5\%$, by converting them into equity shares of Rs 10 each issued at a premium of $25\%$ Journalise.

Q.

J Ltd issued Rs 20, 00, 000, $15\%$ Debentures at $8\%$ discount. Debentures are to be redeemed in the following manner :

$\begin{array}{cc}\text{Year-end}& \text{Face value of Debentures}\\ & \text{Rs}\\ 2& 2,00,000\\ 3& 4,00,000\\ 4& 6,00,000\\ 5& 8,00,000\end{array}$

Pass journal entry for issue of Debentures and prepare Discount on Issue of Debentures Account for 5 years.

Q. ABC Ltd. issued 40, 000; 10% Debentures of ₹ 100 each at par for cash payable in full along with the application. Applications were received for 60, 000 debentures . Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.

Q.

A company issued debentures of the face value of Rs 10, 00, 000 at a discount of $6\%$ on 1st April, 2012. These debentures are redeemable by annual drawings of Rs 2, 00, 000 made on 31st March each year. The directors decided to write off discount based on the debentures outstanding each year. Prepare Discount on Issue of Debentures account for five years.

Q.

Suresh Ltd. on 1st April 2014 acquired assets of the value of Rs 6, 00, 000 and liabilities worth Rs 70, 000 from P & Co., at an agreed value of Rs 5, 50, 000. Suresh Ltd issued $12\%$ Debentures of Rs 100 each at a premium of $10\%$ in full satisfaction of purchase consideration. The debentures were redeemable on 30th November, 2018 at a premium of $5\%$. Pass journal entries to record the above inclusing redemption of debentures.

Q.

Record necessary journal entries in the following cases

(a) Creditors worth Rs. 85, 000 accepted Rs. 40, 000 as cash and investment worth Rs. 43, 000, in full settlement of their claim.

(b) Creditors were Rs. 16, 000. They accepted Machinery valued at Rs. 18, 000 in settlement of their claim.

(c) Creditors were Rs. 90, 000. They accepted Buildings valued Rs. 1, 20, 000 and paid cash to the firm Rs. 30, 000.

Q.

Jiya Ltd. Purchased a running business from Diya Ltd. for a sum of Rs. 2, 00, 000 payable by issue of 20, 000 equity shares of Rs. 10 each.
The assets and liabilities taken over were:
Building Rs. 80, 000, Plant Rs. 80, 000, Debtors Rs. 60, 000 and creditors Rs. 40, 000.
You are required to pass the journal entries in the books of Jiya Ltd.

Q.

A Ltd company issued $9\%$ Debentures of the face value of Rs 6, 00, 000 at a discount of $5\%$ on 1st April, 2011. The debentures are repayable by annual drawing of Rs 2, 00, 000 commercing from the end of 4th year.

Show the 'Discount on Issue of Debentures A/c', in the company's ledger for the period of duration of debentures. Accounts are closed on 31st March each year.

Q.

Sultan Ltd. was registered with an authorised capital of Rs. 50, 00, 000 divided in 5, 00, 000 equity shares of Rs. 10 each. Company invited applications for 3, 00, 000 equity shares at a premium of Rs. 3 per share, payable as follows : Rs. 4 on Application ; Rs. 5 on Allotment (including premium); Balance as and when required.

Applications were received for 2, 75, 000 shares and allotment was made to all applicants. All money due on allotment was duly received except from one shareholder holding 1, 000 shares.

Show the Balance Sheet of the Company.

Q.

The face value of debenture is Rs. 100 and the debentures are issued at par and redeemed at par, it means company will pay back ___

1. None of these

2. Rs 110

3. Rs 90

4. Rs 100

Q.

What is the conclusion of bill of exchange project?

Q. On 1st April, 2014, following were the balances of Blue Bird Ltd.:
10% Debentures (redeemable on 30th September, 2017) ₹ 15, 00, 000
Debentures Redemption Reserve ₹ 2, 00, 000
The company met the requirements of the Companies Act, 2013 regarding Debentures Redemption Reserve and Investment and redeemed the debentures.
Pass necessary journal entries for the above transactions in the books of the company.

Q.

When debentures will be redeemed at their face value/nominal value, they are said to be redeemed at ___

1. Premium

2. Par

3. All of these

4. Discount

Q.

Which account is debited at the time of redemption of debentures?

1. All of these

2. Debenture application & allottment account

3. Debentures account

4. Bank account

Q.

On 1st April, 2016, XYZ Ltd. was formed with an authorized capital of Rs. 25, 00, 000 divided into 2, 50, 000 equity shares of Rs. 10 each. Out of these, the company issued 1, 00, 000 equity shares of Rs. 10 each at a premium of 10%. The amount was payable as follows :

On Application Rs. 4 (including premium)

On Allotment Rs. 4

On Final Call Rs. 3

The public applied for 90, 000 equity shares and all the money was duly received. How will you show the 'Shares Capital' in the Balance Sheet of the company ? Also prepare 'Notes to Accounts' for the same.

Q.

X.Ltd. invites application for the issue of 10, 000, 14% debentures of Rs 100 each payable as to Rs 20 on application, Rs 60 on allotment and the balance on call. The company receives applications for 13, 500 debentures, out of which applications for 8, 000 debentures are allotted in full, 5, 000 only 40% and the remaining rejected. The surplus money on partially allotted applications is utilised towards allotment. All the sums due are duly received.

Q.

At the time of issue, which account is debited at the time of application money being transferred to Debentures Account?

1. All of these

2. Debenture application & allottment account

3. Debentures account

4. Bank account

Q.

Which account is debited at the time of receipt of application money?

1. Debenture suspense a/c

2. Collateral debentures a/c

3. Collateral security a/c

4. None of these

Q.

Describe the meaning of ‘Debenture issued as Collateral Securities’. What accounting treatment is given to the issue of debentures in the books of accounts?

Q.

Pilot Company has issued 80, 000 10% Debentures of Rs.100 each at discount of 10%. These are redeemable at par. How much amount shall be paid to debentureholders at the time of redemption.?

1. None of these

2. 50, 000

3. 80, 00, 000

4. 8, 00, 000

Q.

A company issue 5, 000 12% debentures of Rs. 100 each at par, payabale as follows:
On Application : 20
On Allotment : 80
How much money is received in allotment stage if all the moneys are duly received?

1. Personal Account

2. Real Account

3. All of these

4. Nominal A/c

Q.

A company purchased assets of the book value of Rs 10, 00, 000 from Best Ltd. It was agreed that the purchase consideration would be paid by issuing 13% Fully paid Debentures of Rs 40 each. If Debentures are issued at par then how many such Debentures would be issued by the company to Best Ltd.?

1. 25, 000

2. 1, 00, 000

3. None of these

4. 50, 000

Q.

Debentures are said to be issued at par when their issue price is ___ the face value.

1. All of these

2. More than

3. Equal to

4. Less than

Q.

Can we call money in installments for the debentures ?

1. Yes

2. No

Q. The face value of debenture is Rs. 100 and the debentures are issued at par and redeemed at par, it means company will pay back .

1. Rs. 100
2. Rs. 110
3. Rs. 90
4. Rs. 200

Q. Select most appropriate alternative from those given below :

____________debentures which are recorded in register of company.
a) Simple debentures
b) Registered debentures
c) Bearer debentures
d) Open debentures