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Debentures Practice Paper 2

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29 views2 pages

Debentures Practice Paper 2

Uploaded by

Team Gamers
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accounts

Class 12th
Chapter: 8
Issue of Debentures and Redemption of Debenture

Question 1

Pass necessary journal entries for the following in the book Of Gopal:

i) Purchased furniture for 2,50,000 from M/s furniture mart. The payment to M/s
furniture mart was made by issuing debenture of Rs. 10 each at a premium of
25%.
ii) Purchased a running business from Aman Limited for a sum of Rs 15,00,000. The
payment of Rs. 12,00,000 was made by issue of fully paid debenture of Rs. 10
each and balance by a bank draft. The assets and liabilities consisted of the
following: Plant Rs. 3,50,000; stock Rs. 4,50,000; land and building Rs. 6,00,000;
sundry creditors Rs. 1,00,000

Question 2

Tata Ltd. Issued 5,000, 10% Debentures of 100 each on 1st April,2012. The issue was fully
subscribed. According to the terms of issue, interest on Debentures is payable half-yearly on
30th September and 31st March and tax deducted at source is 10% Pass the necessary
journal entries related to the debenture interest of the half-yearly ending on 31st March,
2013 and transfer of interest on Debentures to statement of profit and Loss.

Question 3

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 will you deal with issue of
debentures in the books of company in both situations.

Question 4

a) Alpha Ltd. has 5,000 8% Debentures of Rs. 100 each due for redemption on March 31,
2007. Assume that Debenture Redemption Reserve has a balance of Rs. 1,90,000 on that
date. Record the necessary entries at the time of redemption of debentures.
b) What journal entries should be made for the issue of debentures in the following cases:
i) X Limited issued 30,000 12% Debentures of Rs.100 each at par, redeemable at a
premium of 5%.
ii) Y Limited issued 50,000 12% Debentures of Rs 100 each at a premium of 5%,
redeemable at 10% premium.
Question 5

A company issued Rs. 4,00,000 debentures on 1st July 2004 which were to be redeemed at
premium of 10%. Redemption is to made in three installment one for Rs. 1,50,000, on 31st
December, 2010. Rs.1,50,000 on 31st December 2012, Rs.1,00,000 on 31st December 2014.
Pass necessary entry on issue and redemption of debenture.

Question 6:

Naima Ltd. purchased an established business for Rs. 2,00,000/- payable as Rs. 65,000/- in
cash and the balance by an issue of 9% Debentures of Rs. 100/- each at a discount of 10%.
Give journal entries in the books of Naina Ltd.

Question 7:

Pass the necessary journal entries in the following case: Kamal Ltd. Redeemed 500, 9%
debentures of Rs. 100/- each issued at a discount of 10%, and to be redeemed at a premium
of 15%.

Question 8:

Tanja Constructions Ltd. has an outstanding balance of Rs. 5,00,000, 7%debentures of Rs. 100
each redeemable at a premium of 10%. According to the terms of redemption, the company
redeemed 30% of the above debentures. Record the entries for redemption of debentures in
the books of Taneja Construction Ltd.

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