Issued at Par and Redeemed at Premium

Q.

Rajan and Rajani are partners in a firm. Their capitals were Rajan Rs. 3, 00, 000; Rajani Rs. 2, 00, 000. During the year 2002, the firm earned a profit of Rs.1, 50, 000. Calculate the value of goodwill of the firm assuming that the normal rate of return is 20%.

Q.

On January 1, 2011, X Ltd issue 5, 000, 8% Debentures of Rs. 100 each repayable at par at the end of three years. It has been decided to set up a cumulative sinking fund for the purpose of their redemption. The investments are expected to realise 4% net. The Sinking Fund Table shows that Rs. 0.320348 amounts to one rupee @ 4% per annum in three years. On December 31, 2013 the balance at bank was Rs. 2, 42, 360 and the investments realised Rs. 3, 25, 000. The debentures were paid off. Give journal entries and show ledger account.

Q. When debenture are issued at par and are redeemable at premium, the loss on such an issue debited to:

1. Debenture Application and Allotment A/c
2. Loss on issue of debenture A/c
3. Profit and Loss A/c
4. Discount on issue of debenture A/c

Q.

Premium on redemption of debentures account is a/an ___

1. None of the above

2. Revenue

3. Liability

4. Asset

Q.

Premium on redemption of debentures is a ________.

1. Loss

2. Profit

3. Revenue

4. None of these

Q.

If debentures are redeemed at premium, the premium on redemption of debentures account shall be credited while ___shall be debited.

1. None of these

2. Loss on issue of Debentures account

3. Debentures account

4. Bank account

Q.

When debentures are issued at par and redeemed at premium an extra entry has to be made at the time of debentures issue, which a/c should be credited in this entry?

1. Bank A/c

2. Debenture Holder's A/c

3. Loss on Issue of Debentures A/c

4. Premium on Redemption of Debentures A/c

Q.

India Steel Ltd., issued 6, 000 12% Debentures of Rs. 100 each at par, redeemable at 5% premium. What is the amount of premium?

1. None of these

2. 50, 000

3. 25, 000

4. 30, 000

Q.

Ruchi Ltd. issued 42, 000, $7\%$ Debentures of Rs 100 each on 1st April, 2011, redeemable at a premium of $8\%$ on 31st March 2015. The company decided to create required Debenture Redemption Reserve on 31st March 2014. The company invested the funds as required by law in a fixed deposit with State Bank of India on 1st April, 2014 earning interest at $10\%$ per annum. Tax was deducted at source by the bank on interest at $10\%$. Pass necessary Journal Entries regarding issue ans redemption of debentures.

Q.

Bharat Ltd had an authorized capital of Rs 20, 00, 000 divided into 2, 00, 000 equity shares of Rs 10 each. The company issued 1, 00, 000 shares and the dividend paid per share was Rs 2 for the year ended 31-3-2008. The management of the company decided to export its products to the neighbouring countries Nepal, Bhutan, Sri Lanka and Bangladesh. To meet the requirement of additional funds the financial manager of the company put up the following three alternatives before its Board of Directors:

(i) Issue 54, 000 equity shares.

(ii) Obtain a loan from Import and Export Bank of India. The loan was available at $12\%$ per annum interest.

(iii) To issue $9\%$ Debentures at a discount of $10\%$.

After comparing the available alternatives the company decided on 1-4-2008 to issue 6, 000 $9\%$ debentures of Rs 100 each at a discount of $10\%$. These debentures were redeemable in four instalments starting from the end of third year. The amount of debentures to be redeemed at the end of third, fourth, fifth and sixth year was as follows:

$\begin{array}{cc}\text{Year}& \text{Amount of Debentures to be redeemed}\\ III& 1,00,000\\ IV& 1,00,000\\ V& 2,00,000\\ VI& 2,00,000\end{array}$

Prepare $9\%$ Debentures Account for the years 2008-09 to 2013-14.

Q. Nitin, Tarun and Amar are partners sharing profits equally and decide to share profits in the ratio of $2:2:1$ w.e.f. $1st$ April, $2018$ . The extract of their Balance Sheet as at $31st$ March, $2018$ is as follows :

Liabilities	Rs.	Assets	Rs.
Investments Fluctuation	$60,000$	Investments (At cost)	$4,00,000$

Pass the Journal entries in each of the following situation :
(i) When its Market Value is not given
(ii) When its Market Value is given as Rs. $4,00,000$ ;
(iii) When its Market Value is given as Rs. $4,24,000$ ;
(iv) When its Market Value is given as Rs. $3,70,000$ ;
(v) When its Market Value is given as Rs. $3,10,000.$

Q. Journal Entry for:-
(I)When Fixed Asset is sold at loss?

Q. When debentures are issued at par and redeemed at premium then premium on redemption of debentures is considered as a/an .

1. liability
2. income
3. expense
4. asset

Q. When amount to be paid to debentureholders is more than their face value, they are said to be redeemed at .

1. par
2. premium
3. discount
4. interest

Q. On January $1$, $2011$, Vibha sold goods worth Rs. $18,000$ to Sudha and drew upon the latter a bill of exchange for the same amount payable after two months. Sudha accepted Vibha's draft and returned the same to Vibha after acceptance. Vibha endorsed the bill immediately in favour of her creditor Geeta. Five days before the maturity of the bill Sudha requested Vibha to cancel the bill since she was short of funds. She further requested to draw a new bill upon her including interest of Rs. $200$. Vibha accepted Sudha's request. Vibha took the bill from Geeta by making the payment to her in cash and cancelled the same. Then. she drew a new bill upon Sudha as agreed. The new bill was payable after one month. The new bill was duly met by Sudha on maturity.
Record the necessary Journal entries in the books of Vibha.

Q. C of Bangalore consigned goods costing Rs. 3, 000 to his agent at Delhi. Freight and insurance paid by consignor Rs. 100. Consignee's expenses Rs. 200. 805 of the goods were sold for Rs. 3, 000. Commission 2% on sales. Consignee want to settle the balance with the help of bank draft. the amount of draft will be __________ .

1. Rs. 2, 740
2. Rs. 2, 800
3. Rs. 3, 000
4. Rs. 1, 800

Q.

If debentures are to be redeemed at premium, the premium on redemption of debentures account shall be ___

1. None of these

2. Not effected

3. Credited

4. Debited

Q.

When amount to be paid to debentureholders is more than their face value/nominal value, they are said to be redeemed at ___

1. All of these

2. Discount

3. Premium

4. Par

Q. Maruti and Suzuki entered into a partnership $5$ months ago. The ratio of profit claimed by Maruti and Suzuki is $6:17$. If Suzuki had just started business $12$ months ago with Rs. $1275$, what is the amount contributed by Maruti?

1. Rs. $980$
2. Rs. $1080$
3. Rs. $1200$
4. Rs. $998$

Q. What will be the treatment of prepaid expenses if adjustment of it is appearing outside the trial Balance?

1. Prepaid Expenses account will be debited and respective expenses account will be credited
2. Respective expense account will be debited and prepaid expenses account will be credited
3. Profit and loss account will be debited and prepaid expenses account will be credited
4. Prepaid expenses account will be debited and profit and loss account will be credited

Q. Following was the position of debtor and creditor of Gautam as on $\mathrm{1.1.2011}$

Items	Debtors(Rs.)	Creditors(Rs.)
Babu	$5,000$	-
Chanderkala	$8,000$	-
Kiran	$13,500$	-
Anita	$14,000$	-
Anju	-	$5,000$
Sheiba	-	$12,000$
Manju	-	$6,000$

The following transactions took place in the month of Jan $2011$
Jan $2$
Drew on Babu at two months after date at full settlement for Rs. $4,800$.
Babu accepted the bill and returned it on $\mathrm{5.1.2011}$.
Jan $4$
Babu's bill discounted for Rs. $4,750$.
Jan $8$
Chanderkala sent a promissory note for Rs. $8,000$ payable three months after date.
Jan $10$
Promissory note received from Chanderkala discounted for Rs. $7,900$.
Jan $12$
Accepted Sheiba draft for the amount due payable two months after date.
Jan $22$
Anita sent his promissory note payable after two months.
Jan $23$
Anita's promissory note endorsed in favour of Manju.
Jan $25$
Accepted Anju's draft payable after the three months.
Jan $29$
Kiran sent Rs. $2,000$ in cash and a promissory note for the balance payable after three months.
Record the transactions in the proper subsidiary books.

Q. Give one example for current liability.

Q. reliable ltd sold fixed assets of rs 50, 000 and took over plant of rs.5, 00, 000 at an agreed value of rs 3, 80, 000 from perfect ltd.
reliable ltd issued debentures at 5 percent discount in full satisfaction of the purchase price.pass journal entries in books of both buyers and sellers