On 1st April, 2017, 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, 2018.

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Solution

In the books of Solar Power Ltd.

An Extract of Balance Sheet

As at 31^st March, 2018

Particulars

Note
No.

Amount
(₹)

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

II. Assets

Current Assets

Cash and Cash Equivalents
4

9,50,000

Notes to Accounts:

Note
No.

Particulars

Amount
(₹)

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

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In the books of Solar Power Ltd. An Extract of Balance Sheet As at 31^st March, 2018
Particulars	Note No.	Amount (₹)
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


II. Assets
Current Assets
Cash and Cash Equivalents	4	9,50,000

Notes to Accounts:
Note No.	Particulars		Amount (₹)
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