Sir Padampat Singhania Education Centre

Kamla Nagar, Kanpur.

Topic – Issue of Shares & Debentures

1. Tractors India Ltd’ is registered with an authorised capital of Rs.10,00,000 divided into 1,00,000 equity
shares of Rs.10 each. The company issued 50,000 equity shares at a premium of Rs.5 per share. Rs.2 per share
were payable with application, Rs.8 per share including premium on allotment and the balance amount on
first and final call. The issue was fully subscribed and all the amount due was received except the first and
final call money on 500 shares allotted to Balram.
Present the ‘share capital’ in the balance sheet of ‘Tractors India Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.

2. 1st April, 2012 Vivek Ltd was formed with an authorised capital of Rs.1,00,00,000 divided into 2,00,000
equity shares of Rs.50 each. The company issued prospectus inviting applications for 1,80,000 shares. The
issue price was payable as under:
On application : Rs.15 On allotment : Rs.20 On call : Balance amount
The issue was fully subscribed and the company allotted shares to all the applicants. The company did not
make the call during the year.
Present the ‘share capital’ in the balance sheet of ‘Vivek India Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.

3. The authorised capital of Suhas Ltd is Rs.50,00,000 divided into 25,000 shares of Rs.200 each. Out of these,
the company issued 12,000 shares of Rs.200 each at a premium of 10%. The amount per share was payable as
follows
Rs.60 on application Rs.60 on allotment (including premium)
Rs.30 on first call and balance on final call.
Public applied for 11,000 shares. All the money was duly received.
Present the ‘share capital’ in the balance sheet of ‘Suhas Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.

4. Janta Ltd had an authorised capital of 2,00,000 equity shares of Rs.10 each. The company offered to the
public for subscription 1,00,000 shares. Applications were received for 97,000 shares. The amount was
payable as follows on application was Rs.2 per share, Rs.4 was payable each on allotment and first and final
call. A shareholder holding 600 shares failed to pay the allotment money. His shares were forfeited. The
company did not make the first and final call.
Present the ‘share capital’ in the balance sheet of ‘Janta Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.

5. Suvidha Ltd’ is registered with an authorised capital of Rs.10,00,00,000 divided into 10,00,000 equity
shares of Rs.100 each. The company issued 1,00,000 shares for public subscription. A shareholder holding
100 shares, faded to pay the final call of Rs.20 per share. His shares were forfeited. The forfeited shares were
re-issued at Rs.90 per share as fully paid-up.
Present the ‘share capital’ in the balance sheet of ‘Suvidha Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.

6. On 1st April, 2012, Vishwas Ltd was formed with an authorised capital of Rs.10,00,000 divided into
1,00,000 equity shares of Rs.10 each. The company issued prospectus inviting applications for 90,000 equity
shares. The company received applications for 85,000 equity shares. During the first year, Rs.8 per share were
called. Ram holding 1,000 shares and Shyam holding 2,000 shares did not pay the first call of Rs.2 per share.
Shyam’s shares were forfeited after the first call and later on 1,500 of the forfeited shares were re-issued at
Rs.6 per share, Rs.8 called-up.
Present the ‘share capital’ in the balance sheet of ‘Vishwas Ltd’ as per Schedule III, Part I of the
Companies Act, 2013. Also prepare notes to accounts for the same.
7. L Ltd forfeited 470 equity shares of Rs.20 each issued at a premium of Rs.3 per share for the non-payment of
allotment money of Rs.8 (including premium Rs.3) and first call of Rs.5 per share. Final call of Rs.5 per share
was not made. Out of these 235 shares were re-issued at Rs.19 each fully paid.
Pass necessary journal entries for the above transactions in the books of L Ltd.

8. Give journal entries to record the following transaction of forfeiture and re-issue of shares and open
share forfeiture account.
L Ltd forfeited 470 equity shares of Rs.10 each issued at premium of Rs.5 per share for non-payment of
allotment money Rs.8 per share (including share premium Rs.5 per share) and the first and final call of Rs.5
per share. Out of these, 60 equity shares were subsequently re-issued @ Rs.14 per shares.

9. L Ltd forfeited 1,000 equity shares of Rs.10 each issued at a premium of 10% to Shyam(Rs.9 called up) for the
non-payment of allotment money of Rs.3 (including premium) and first call of Rs.2 per share. Out of these 600
shares were re-issued at Rs.8 per share and 200 shares at Rs.12 per share fully paid. Pass necessary journal
entries for the above transactions in the books of L Ltd. .
Pass necessary Journal entries for forfeiture and reissue of shares.

10. Show by means of journal entries how would you record the following issues:
(i) A Ltd. issues Rs.5,00,000, 13% Debentures at a discount of 8% redeemable at par.
(ii) B Ltd. issues Rs.6,00,000 12% Debentures at a discount of 6% redeemable at a premium of 7%.
(iii) C Ltd. issued 10,000 12% Debentures of Rs.100 each at a discount of 5%, but redeemable at a premium
of 5% after 5 years.

11. On July 01, 2022, X Ltd. issued 20,000, 9% Debentures of Rs.100 each at 8% premium and redeemable at
a premium of 15% in four equal instalments starting from the end of the third year. The balance in Securities
Premium on the date of issue of debentures was Rs.80,000. Interest on debentures was to be paid on March
31 every year. You are required to

(i) Pass entries for issue of debentures.

(ii) Pass entry for writing off loss on Issue of debentures.
Pass entries for Interest on Debentures on March 31 2023, if it is to be paid on March 31 every year.