On 1^st Aril, 2017, Jumbo Ltd. issued 10,000; 12% debentures of Rs. 100 each a discount of 20%, redeemable after 5 years. The company decided to write-off discount on issue of such debentures over the life time of the Debentures. Show the items in the balance sheet of the company immediately after the issue of these debentures.

Open in App

Solution

Balance Sheet

as at April 01, 2017

Particulars

Note No.

Amount

(Rs)

I. Equity and Liabilities

1. Shareholders’ Funds

a. Share Capital

b. Reserves and Surplus

2. Non-Current Liabilities

a. Long-term Borrowings

1

10,00,000

3. Current Liabilities

a. Other Current Liabilities

b. Short-term Provisions

Total

10,00,000

II. Assets

1. Non-Current Assets

a. Other Non-Current Assets

2

1,60,000

2. Current Assets

a. Other Current Assets

3

40,000

b. Cash and Cash Equivalents
4

8,00,000

Total

10,00,000

Notes to Accounts

Particulars

Amount

(Rs)

1. Long Term Borrowings

12% Debentures

10,00,000

2.Other Non-current assets

Unamortized discount on issue of Debentures

1,60,000

3. Other Current Assets

Unamortized discount on issue of Debentures

40,000

4. Cash and Cash Equivalents

Bank

8,00,000

Suggest Corrections

Similar questions

Q. On 1st May, 2016, Goodluck Ltd. issued 16,000, 9% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% redeemable after five years. All the debentures were subscribed and allotment was made . Discount on issue of Debentures is to be written off over the life of the debentures.
Prepare the Balance Sheet (extract) as at 31st March, 2017 showing Discount on issue of Debentures.

A limited company issued ₹ 1,00,000, 9% Debentures at a discount of 6% on 1st April, 2017. These debentures are to be redeemed equally, spread over 5 annual instalments.

Pass the Journal entries for issue of debentures and writing off the discount.

Q. On 1st June, 2015, R Energy Ltd. issued 10,000, 7% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% at the end of five years . All the debentures were subscribed and allotment was made . Loss on issue of Debentures is to be written off over the life of the debentures.
Prepare the Balance Sheet (extract) as at 31st March, 2016 and 31st March, 2017 showing Loss on issue of Debentures.

Q. On 1st April, 2013, ABC Ltd. issued 10,000 , 10% Debentures of ₹ 100 each at a discount of 4% redeemable after 5 years at a premium of 6% .
Pass the necessary journal entries for issue of debentures and writing off Loss on issue of Debentures. Also prepare Loss on issue of Debentures Account.

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.

Join BYJU'S Learning Program

Balance Sheet as at April 01, 2017
Particulars	Note No.	Amount (Rs)
I. Equity and Liabilities
1. Shareholders’ Funds
a. Share Capital
b. Reserves and Surplus
2. Non-Current Liabilities
a. Long-term Borrowings	1	10,00,000
3. Current Liabilities
a. Other Current Liabilities
b. Short-term Provisions
Total		10,00,000

II. Assets
1. Non-Current Assets
a. Other Non-Current Assets	2	1,60,000
2. Current Assets
a. Other Current Assets	3	40,000
b. Cash and Cash Equivalents	4	8,00,000
Total		10,00,000

Notes to Accounts
Particulars	Amount (Rs)
1. Long Term Borrowings
12% Debentures	10,00,000

2.Other Non-current assets
Unamortized discount on issue of Debentures	1,60,000

3. Other Current Assets
Unamortized discount on issue of Debentures	40,000

4. Cash and Cash Equivalents
Bank	8,00,000