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Worksheet

Ques 1 What are Convertible Debentures ? [Sample paper, Delhi, 2008 (Comptt)]

Ques 2 What is meant by Debentures for consideration other than cash?[Delhi 2008 (Comptt.)]

Ques 3 Why would an investor prefer to invest in the Debentures of a company rather than in its Shares? [Foreign 2009,
Delhi, AI 2009]

QUES 4 Why would an investor prefer to invest partly in Shares and partly in Debentures of a company? [Foreign 2009, Delhi,

B.
Al 2009]

Ques 5 Why would an investor prefer to invest in Shares of a company rather than in its Debentures?[Foreign 2009, Delhi, Al
2009]

QUES 6 What is the nature of Interest on Debentures?

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Ques 7 Give the meaning of Issue of Debentures as a Collateral Security.[Sample Paper, Outside 2011]
Ques 8 Shruti Ltd bought the business of Shinkey Ltd on 1.4.2007 consisting of Sundry Assets of RS 5,60,000 and creditors RS 1,00,000 for a purchase
consideration of RS 5,00,000. RS 1,00,000 was paid in cash on3.4. 2007 and for the balance 6% Debentures were issued at a premium of 25% on 5. 4. 2007. Pass
necessary journal entries in the books of Shruti Ltd.[2008 Al (Comptt)]
Ques 9 Shobha Ltd. bought the business of Pratibha Ltd. on 1.4. 2007 consisting of Sundry Assets of Rs 11,20,000 and creditors Rs 2,00,000 for a purchase
consideration of Rs10,00,000. RS 2,00,000 was paid in cash on 3.4. 2007 and for the balance 6% debentures were issued at a premium of 25% on 5.4.2007. Pass
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necessary journal entries in the books of Shobha Ltd. for the above mentioned transaction.[2008 Al (Comptt)]

Ques 10 (a) Wellflo Ltd. took over assets of < 9,80,000 and liabilities of 7 40,000 of HDR Ltd. at an agreed value of Rs 9,00,000. Wellflo Ltd. paid to HDR Ltd. by
issue of 9% debentures of ?Rs100 each at a premium of 20%. Pass necessary

(b) Give the necessary journal entries in each of the following cases if the face value of a debenture is Rs100.
(i) A debenture issued at RS 104 repayable at Rs100.
(ii) A debenture issued at Rs 100 repayable at Rs105.
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(it) A debenture issued at Rs108 repayable at RS 105 [2009 Foreign]

Ques 11 Beeta Ltd. issued 5,000, 9% debentures of RS 500 each. Pass the necessary journal entries for the issue of Debentures in the books of the company in
the following cases :
(i) When debentures are issued at 10% premium and redeemable at par.
(ii) When debentures are issued at par and redeemable at 10% premium.
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(iii) When debentures are issued at 5% premium and redeemable at 10% premium.
(iv) When debentures are issued at a premium of 25% to the vendors for machinery purchased for Rs 6,25,000.[2009 Al (Comptt)]

Ques 12 . Sharma Ltd. bought the business of Verma Ltd. on 1.4.2007 consisting of Sundry Assets of Rs 2,80,000 and creditors of RS 50,000, Rs50,000 was paid
in cash on 3.4.2007 and For The balance 6% Debentures were issued at a premium of 20% on 5.4.2007. Pass necessary journal entries in the books of Sharma
Ltd. for the above mentioned transactions.[2008 Foreign]

Ques 13 Shankar Ltd. bought the business of Narad Ltd. on 1.4.2007 consisting of Sundry Assets of Rs 2,80,000 and creditors of RS 50,000 for a purchase
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consideration of Rs 2,50,000. Rs50,000 was paid in cash on 3.4.2007 and for the balance 6% Debentures were issued at a premium of 25% on 5.4.2007. Pass
necessary journal entries in the books of Shankar Ltd. for the above mentioned transactions.(2008 Al Comptt)

Ques 14 Sharma Ltd. bought the business of Verma Ltd. on 1.4.2007 consisting of Sundry Assets of Rs 2,80,000 and creditors of RS 50,000. Rs50,000 was paid in
cash on 3.4.2007 and for the balance 6% Debentures were issued at a premium of 20% on 5.4.2007. Pass necessary journal entries in the books of Sharma Ltd. for
the above mentioned transactions.(2008 Delhi (Comptt).
Ques 15 Shyama Ltd. bought the business of Rama Ltd. on 1.4.2007 consisting of Sundry Assets of Rs11,20,000 and creditors of Rs 2,00,000. Rs 2,00,000 was
paid in cash on 3.4.2007 and for the balance 6% Debentures were issued at a premium of 20% on 5.4.2007. Pass necessary journal entries in the books of Shyama
Ltd. for the above mentioned transactions.[2008 Foreign]
Ques 16 Pass the necessary Journal entries for the issue of Debentures in the following cases :
(a) Rs 40,000, 15% Debentures of Rs 100 each issued
(b) Rs90,000, 15% Debentures of RS100 each issued at a discount of 5% redeemable at premium of 10%. [20013 Outside]
Ques 17 Pass necessary Journal entries for the issue and redemption of Debentures in the following
cases:
(i) 15,000, 9% debentures of Rs 250 each issued at 5% premium, repayable at 15% premium.
(ii) 2,00,000, 12 % Debentures of & 10 each issued at 8% premium, repayable at par.(2011 Outside]
Ques 18 Pass necessary journal entries for 'issue of debentures' for the following:
(a) Jain Ltd issed 750, 12% Debentures of Rs100 each at a discount of 10% redeemable at a premium of 5%.

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(b) Sohan Ltd. issued 800, 9% Debentures of Rs 100 each at a premium of & 20 per Debenture redeemable at a premium of Rs 10 per Debenture.
Ques 19 Somaly Ltd. bought the business of Romaly Ltd. on 1.4.2007 consisting of Sundry Assets of Rs 5,60,000 and creditors of Rs 1,00,000. Rs1,00,000 was
paid in cash on 3.4.2007 and for the balance 6% Debentures were issued at a premium of 20% on 5.4.2007. Pass necessary journal entries in the books of
Somaly[2008 Foreign]
Ques 20 (a) Mohit Ltd. took over assets for RS 8,40,000 and liabilities of Rs 80,000 of Ram Ltd. at an agreed value of Rs 7,20,000. Mohit Ltd. paid to Ram Ltd. by
issue of 9% debentures of Rs100 each at a premium of 20%.Pass the necessary journal entries to record the above transactions in the books of Mohit Ltd.

(b) Give journal entries in each of the following cases if the face value of a debenture is RS 100.
(i) A debenture issued at Rs 110 repayable at Rs100.
(ii) A debenture issued at Rs 100 repayable at Rs 105.
(ii) A debenture issued at Rs 105 repayable at Rs 105.
Ques 21 Pass the necessary journal entries for the issue of debentures in the following cases
(a) Rs 30,000, 12% Debentures of Rs 100 each issued at a discount of 5% redeemable at par.
(b) Rs 60,000, 12% Debentures of Rs 100 each issued at a discount of 5% redeemable at Rs105.[2013 Delhi]
Ques 22 X Ltd. issued 10,000, 10% debentures of Rs 100 each at a premium of 10% payable Rs30 on application, Rs50 (including premium) on allotment and
balance on call. The issue was oversubscribed to the extent of 5,000 debentures. The company made a pro-rata allotment. Excess application money was adjusted

B.
towards sums due on allotment. All sums were duly received.Record Journal entries to give effect to these transactions.
Ques 23 X Ltd. obtained a loan ofRs 6,00,000 from IDBI Bank. The company issued 7,000, 9% Debentures of RS 100 each as collateral security for the same.
Show how these items will be presented in the Balance Sheet of the company.[2009 Delhi ]
Ques 24 A company took a loan of rs 5,00,000 from State Bank of India and issued 10% debentures of RS 8,00,000 of Rs 100 each as a collateral security. Explain
how you will deal with the issue of debentures in the books of the company.[Sample Paper 2013]

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Ques 25 X Ltd. obtained a loan of 3,00,000 from IDBI Bank. The company issued 4,000, 9% Debentures of Rs 100 each as a collateral security for the same. Show
how these items will be presented in the Balance Sheet of the company. [2010 Outside]
Ques 26 What journal entries should be made for the issue of debentures in the following cases:
(i) X Ltd. issued 30,000, 12% Debentures of rs 100 each at par, redeemable at a premium of 5%.
(ii) Y Ltd issued 50,000, 12% Debentures of rs100 each at a premium of 5% redeemable at par.[Sample Paper 2013]
Ques 27 Alfa Ltd. issued 10,000, 9% debentures of rs100 each. Pass the necessary journal entries for issue of debentures in the following cases:
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(i) When debentures are issued at par and redeemable at par.
(ii) When debentures are issued at par and are redeemable at a premium of 10%.
(iii) When debentures are issued at a premium of 25% to the vendors for the purchase of machinery worth rs 1,25,000.
(iv) When debentures are issued at a premium of rs 250 each and are redeemable at par.[2009 Delhi (Comptt)]
Ques 28 Pass the necessary Journal entry when 10,000 debentures of rs100 each are issued as collateral security against a Bank Loan of 7 8,00,000.[2011 Delhi]
Ques 29 X Ltd obtained a loan of rs 4,00,000 from IDBI Bank. The company issued 5,000, 9% Debentures of rs100 each as a collateral security for the same.
These items will be presented in the Balance Sheet of the Company.
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Ques 30 Narain Laxmi Ltd. invited applications for issuing 7,600, 12% Debentures of rs 100 each at a premium of rs 35 per debenture. The full amount was
payable on application.Applications were received for 10,000 Debentures. Applications for 2,500 Debentures were rejected and the application money was
refunded. Debentures were allotted to the remaining applicants.Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.
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