ICM 12th Standard Gautam Bery

CHAPTER 2
COMPANY ACCOUNTS - ISSUE OF DEBENTURES
Q1. Trupati Ltd. issued 20,000, 11% Debentures of Rs.100 each, payable as follows : Rs.25 on application;
Rs.35 on allotment and Rs.40 on first and final call.
All the debentures were applied. A, the holder of 500 debentures paid the entire amount on his holding
on allotment and B, the holder of 100 debentures failed to pay the allotment and final call. Pass entries.

Q2. Rose Ltd. issued 10,000, 10% Debentures of Rs.100 each, payable as follows :
Rs.10 on application, Rs.20 on allotment, Rs.30 on first call and Rs.40 on second and final call.
Arun, who holds 500 debentures failed to pay the amount due on allotment. He, however, pays this
amount with the first call money. Dinesh, who holds 800 debentures paid all the calls in advance on
allotment. Pass entries.

Q3. Rohan Chemicals Ltd. of Mumbai issued 1,00,00,000, 10% Debentures of Rs.100 each at a premium of
10% payable as Rs.40 on application and Rs.70 on allotment. Debentures are redeemable on March 31,
2020. Record necessary entries to record issue of debentures assuming that the issue is fully subscribed
and all the money due is received.

Q4. Narain Ltd. invited applications for issuing 7,500, 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 Ltd.

Q5. Surya Ltd. issued 2,500, 15% Debentures of Rs. 100 each at a discount of 10% payable as follows:
Rs.25 on application; Rs.25 on allotment and the balance on First Call.
Applications were received for 2,000 debentures and the allotment was made. All the moneys were duly
received. Expenses on issue of debentures amounted to Rs.8,000. Directors decided to write off l/5th of

year.
Pass journal entries (for first year only).

Q6. (i) On 15-2-2017 A Ltd. invited applications for issue of 1,00,000 9% debentures of Rs. 100 each at a
discount of 6%, redeemable at par after 3 years. The full amount was payable on application and the
debentures were issued on 15-3-2017. Pass the journal entries for the above transactions.
(ii) R Ltd. issued 10,000, 12% Debentures of Rs. 100 each at a discount of 5%. Pass Journal entries.

Q7. R Limited took over assets of Rs. 5,60,000 and creditors of Rs.80,000 from S Limited. R Limited issued
8% debentures of Rs.20 each at a premium of 20% as purchase consideration, to S Limited.
Calculate the amount of purchase consideration, number of debentures issued by R Limited and pass
the necessary journal entries in the books of R Limited from the above mentioned informations.

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Q8. Prakash Ltd. purchased assets worth Rs.2,20,000 and also took over the liabilities (creditors) of
Rs.40,000 of Ajay Ltd. for a purchase consideration of Rs. 1,92,000. Prakash Ltd. paid the purchase
consideration by issuing 12% debentures of Rs.100 each at a premium of 20%.
Pass necessary journal entries in the books of Prakash Ltd.

Q9. Venus Ltd. took over assets of Rs. 10,00,000 and liabilities of Rs. 1,80,000 of Cayns Ltd. for
Rs.7,60,000. Venus Ltd. issued 9% Debentures of Rs. 100 each at a discount of 5% in full satisfaction of the
purchase consideration in favour of Cayns Ltd.
Pass necessary journal entries in the books of Venus Ltd. for the above transactions.

Q10. Raghav Limited purchased a running business from Krishna Traders for a sum of Rs. 15,00,000,
payable Rs. 3,00,000 by cheque and for the balance issued 9% Debentures of Rs. 100 each at par.

The assets and liabilities consisted of the following : Rs.

Plant and Machinery 4,00,000

Buildings 6,00,000

Stock 5,00,000

Sundry Debtors 3,00,000

Sundry Creditors 2,00,000

Record necessary journal entries in the books of Raghav Limited.

Q11. Y Ltd., purchased plant and machinery for Rs.2,00,000 from Z Ltd. 20% of the amount was paid by Y
Ltd. by accepting a bill of exchange in favour of Z Ltd. and the balance was paid by issuing 6% debentures
of Rs. 1,000 each at a premium of 25%. Journalise the above transactions.

Q12. X Ltd. purchased assets of Y Ltd. as under :

Plant and Machinery of Rs. 20,00,000 at Rs. 18,00,000; Land and Buildings of Rs.30,00,000 at
Rs.42,00,000 for purchase consideration of Rs. 55,00,000 and paid Rs. 10,00,000 in cash and remaining by
issue of 8% Debentures of Rs. 100 each at a premium of 20%. Record necessary entries in the books of X
Ltd.

Q13. Z Ltd. purchased machinery from K Ltd. Z Ltd. paid K Ltd. as follows :
(i) By issuing 5,000 equity shares of Rs.10 each at a premium of 30%.
00 By issuing 1000, 8% Debentures of Rs. 100 each at a discount of 10%.
(iii) Balance by giving a promissory note of Rs.48,000 payable after two months.
Pass necessary journal entries for the purchase of machinery and payment to K Ltd. in the books of Z
Ltd.

Q14. Meghnath Limited took a loan of Rs. 1,20,000 from a bank and deposited 1,400, 8% debentures of
Rs.100 each as collateral security along with primary security worth Rs.2 lakhs. Company again took a loan
of Rs. 80,000 after two months from a bank and deposited 1,000, 8% debentures of Rs.100 each as

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collateral security. Record necessary journal entries. How will you show the issue of Debentures and Bank
Loan in the balance sheet of the company.

Q15. A Ltd. Company issued debentures of Rs. 1,00,000 which were issued as follows :

(1) For cash at 90% Rs.50,000 (Nominal)

(2) For creditor for Rs.20,000

Capital Expenditure in satisfaction of his claim Rs.25,000 (Nominal)

(3) To Bankers for a loan of Rs. 15,000 as

collateral security Rs.25,000 (Nominal)

The issue (1) and (2) are redeemable at the end of 10 years at par. Pass Journal Entries (for first year
only).

Q16. M Ltd. issued 10,000, 8% debentures of Rs.100 each at a premium of 10% on 1-4-2017. It purchased
fixed assets of the value of Rs.2,50,000 and took over current liabilities of Rs.40,000 and issued 8%
debentures at a premium of 5% to the vendor. On the same date it took loan from the Bank for Rs. 1,00,000
and issued 8% debentures as Collateral Security. Record the relevant journal entries in the books of M Ltd.
and prepare the extract of balance sheet on 31-3-2018. Ignore interest.

Q17. Give journal entries for the issue of debentures in the following conditions.
I. Issued 2,000, 12% debentures of Rs.100 each at par, redeemable also at par.
II. Issued 2,000, 12% debentures of Rs.100 each at a discount of 2%, redeemable at par.
III. Issued 2,000, 12% debentures of Rs.100 each at a premium of 5%, redeemable at par.
IV. Issued 2,000, 12% debentures of Rs. 100 each at par but redeemable at 5% premium.
V. Issued 2,000, 12% debentures of Rs. 100 each at a discount of 2%, redeemable at a premium of 5%.
VI. Issued 2,000, 12% debentures of Rs. 100 each at a premium of 5%, redeemable at a premium of 10%.
Q18. On 2-3-2016, L and B Ltd. issued 635, 9% debentures of Rs. 500 each.
Pass necessary Journal entries for the issue of debentures in the following situations :
(a) When debentures were issued at 5% discount, redeemable at 10% premium.
(b) When debentures were issued at 12% premium, redeemable at 6%
premium.

Q19. 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.
(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.

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Q20. On 1st April, 2016 Alok Ltd. issued 7,000, 10% Debentures of Rs.500 each at a premium of 5% and
redeemable at a premium of 10% after 5 years. According to the terms of issue, Rs.200 was payable on
application and balance on allotment. Record necessary entries regarding issue of debentures.

Q21. On 1.4.2015, J.K. Ltd. issued 8,000, 9% debentures of Rs. 1,000 each at a discount of 6%,
redeemable at a premium of 5% after three years. The company closes its books on 31st March every year.
Interest on 9% debentures is payable on 30th September and 31st March every year. The rate of tax
deducted at source is 10%.
Pass necessary journal entries for the issue of debentures and debenture interest for the year ended
31.3.2016.

Q22. On 1st Nov. 2018, Airtel Ltd. issued 40,000, 10% Debentures of Rs.100 each at a discount of 5%,
redeemable at par after four years. The debentures were fully subscribed. It has a balance of Rs.80,000 in
Capital Reserve and Rs.1,50,000 in Securities Premium Reserve which the company decided to use for
writing off the discount on issue of debentures.
Pass the Journal entries for issue of debentures and writing off the discount. Also prepare Discount on
Issue of Debentures Account.

Q23. On 1st April, 2018 X Ltd. issued 20,000, 10% Debentures of Rs.100 each at a discount of 5%
redeemable at a premium of 4% after 5 years. It decided to write off loss on issue of debentures in the year
ended 31st March, 2019 first from Capital Reserve then from Securities Premium Reserve and balance from
Statement of Profit & Loss. It has the following balances :
Capital Reserve Rs.1,00,000 and Securities Premium Reserve Rs.50,000.
Pass the Journal entries for the issue of debentures and writing off the loss.

Q24. On 1st April, 2012, a Limited Company issued 11% Rs. 10,00,000 debentures at a discount of 6%,
repayable at the end of 5 years at par. Pass journal entries for the issue of debentures and prepare Discount
on Issue of Debentures Account for five years. Assume that the accounts are closed on 31st March each
year.

Q25. A company issued debentures of the face value of Rs. 10,00,000 at a discount of 6% on 1st April,
2012. These debentures are redeemable by annual drawings of Rs.2,00,000 made on 31st March each
year. The directors decided to write off discount based on the debentures outstanding each year. Prepare
Discount on Issue of Debentures account for five years.

Q26. A Ltd. company issued 9% Debentures of the face value of Rs.6,00,000 at a discount of 5% on 1st
April, 2011. The debentures are repayable by annual drawing of Rs.2,00,000 commencing from the end of
4th year.

debentures. Accounts are closed on 31st March each year.

Q27. J Ltd. issued Rs.20,00,000, 15% Debentures at 8% discount. Debentures are to be redeemed in the
following manner :

Year-end Face value of Debentures

Rs.

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2 2,00,000

3 4,00,000

4 6,00,000

5 8,00,000

Pass journal entry for issue of Debentures and prepare Discount on Issue of Debentures Account for 5
years.

Q28. Ashwathi Ltd. issued 40,00,000, 10% Debentures of Rs.50 each at a discount of 8% on April 1, 2010,
redeemable in four equal annual instalments starting with March 31, 2013. Securities premium account
shows a balance of Rs.70,00,000. Compute the amount of discount/loss to be written off and also record the
journal entries in the books of Ashwathi Ltd.

Q29. Ankur Jewellery Ltd. issued 50,00,000, 8% Debentures of Rs. 100 each at a discount of 6% on April 1,
2012 redeemable at premium of 4% by draw of lots as under :
20,00,000 Debentures on March 31, 2015
10,00,000 Debentures on March 31, 2016
20,00,000 Debentures on March 31, 2017
Compute the amount of discount to be written off in each year till debentures are paid. Also prepare
discount/loss on issue of debentures account.

Multiple Choice Questions

Select the Best Alternate :
Q1. Debenture holders are :
(A) Owners of the Company (B) Debtors of the Company
(C) Creditors of the Company (D) Promoters of the Company

Q2. Zero Coupon Bonds are issued :

(A) At Zero Interest Rate (B) With Specified Rate of Interest
(C) Without Specified Rate of Interest (D) None of These

Q3. Interest payable on debentures is :

(A) an appropriation of profits of the c ompany
(B) a charge against profits of the company
(C) transferred to sinking fund investment account
(D) transferred to general reserve

Q4. A debenture holder is entitled to :

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(A) Fixed dividend (B) Share in profits

(C) Voting rights in the company (D) Interest at the fixed rate

Q5. Which of the following statements is false?

(A) Debenture is a form of public borrowing.
(B) It is customary to prefix debentures with the agreed rate of interest.
(C) Debenture interest is a charge against profits.
(D) The issue price and redemption value of debentures cannot differ.

Q6. Which of the following is not a characteristic of Bearer Debentures?

(A) They are treated as negotiable instruments.
(B) Their transfer requires a deed of transfer.
(C) They are transferable by mere delivery.
(D) The interest on it is paid to the holder irrespective of identity.

Q7. Which of the following statements is false?

(A) At maturity, debenture holders get back their money.
(B) Debentures can be forfeited for non-payment of call money.
(C)
(D) Interest on debentures is a charge against profits.

Q8. Which of the following statements is false :

(A) A Company can issue redeemable debentures.
(B) A Company can issue debentures with voting rights.
(C) A Company can issue convertible debentures.
(D) A Company can buy its own debentures and shares.

Q9. Discount on the issue of Debentures should be shown on the :

(A) As Expenses in the Statement of P & L
(B) Equity & Liabilities side of B/S
(C) Assets side of B/S
(D) As Income in the Statement of P & L
Q10. Debentures of a Company can be issued :
(A) For Cash (B) For Consideration other than Cash
(C) As a Collateral Security (D) Any of the above
Q11. On issue of debentures as a collateral security, which account is credited?
(A) Debentures Account (B) Bank Loan Account
(C) Debenture Holdings Account (D) Debenture Suspense Account

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Q12. Interest on debentures issued as a collateral security is paid on :

(A) Nominal value of debentures (B) No interest is paid
(C) Face value of debentures (D) Paid up value of debentures

Q13. Loss on Issue of Debentures is written off:

(A) In the year of the issue of debentures
(B) During the life of the debentures
(C) Within 3 years of the issue of debentures
(D) In the year of redemption of debentures

Q14. When debentures are to be redeemed at premium an extra entry has to be made at the time of issue of
debentures, which a/c should be credited in this entry?
(A) Loss on issue of debentures a/c
(B) Debenture redemption premium a/c
(C) Bank a/c
(D)

Q15. Premium on Redemption of Debentures Account is :

(A) Personal Account (B) Real Account
(C) Nominal Account (D) All of the Above

Q16. If On 1st April 2017, Sunrise Limited issued 5,000, 8% debentures of Rs.100 each at a discount of 5%.
What will be the total amount of interest for the year ending 31 st March 2018?
(A) Rs.38,000 (B) Rs.42,000
(C) Rs.40,000 (D) Rs.25,000

VERY SHORT ANSWER QUESTIONS

(Questions Carrying 1 Mark)
Remembering (Knowledge Based)
Q1. What is meant by unsecured debenture?
Ans. These debentures are those which are not given any security. The holders of such debentures are
treated as unsecured creditors at the time of liquidation of the Company.

Q2. What is meant by registered debenture?

Ans. Such debentures are not freely transferable. The Transfer of such debentures requires the execution of
a proper transfer deed. Principal amount and interest on such a debenture is paid to the person whose name

Q3.

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Ans. Names and addresses of the holders of such debentures are not recorded in the Company and these
debentures are transferable by mere delivery. Coupons are attached with these debentures and the interest
is paid to such persons who produce the coupons in the specified bank.

Q4.
Ans. Redeemable debentures are those debentures which will be repaid by the Company at the end of a
specified period or by instalments during the lifetime of the Company. Most of the debentures are generally
of this type.

Q5.
Ans. Irredeemable debentures are those debentures which are not repayable by the Company during its
lifetime. These debentures are repayable only at the time of liquidation of the Company.

Q6.
Ans. Convertible debentures are those debentures which are convertible into equity shares or other
securities at a stated rate of exchange either at the option of debentureholders or at the option of the
company after a specified period.

Q7. What is meant by Non-Convertible Debentures?

Ans. Non-Convertible debentures are the debentures which are not convertible into shares or other
securities of the company.

Q8. What is meant by Fully Convertible Debentures and Partly Convertible Debentures?
Ans. When only a part of the amount of debenture is convertible into shares or other securities, such

Q9.
Ans. A Zero Coupon Bond is one which does not cany any specific rate of interest. In order to compensate
the investors, such bonds are issued at a substantial discount. The difference between issue price and the
redemption price represents the total interest to be spread over the duration of the bond.

Q10. What is Coupon rate?

Ans. Coupon rate is the rate of interest at which interest is paid by the Company on its debentures.

Q11. What is meant by Issue of Debentures as Collateral Security?

Ans. Sometimes, when a Company takes a loan, the Company may have to issue debentures as a
subsidiary or secondary security in addition to the principal security. If a default is made either in the
payment of interest or in the payment of principal debt, the lender will first realise its debt from the principal
security. But if the full amount of debt is not realised from the principal security, it may claim all the rights of a
debentureholder.

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Q12. What entry may be passed when debentures are issued as Collateral Security?
Ans. Debenture Suspense A/c Dr.
To Debentures A/c

Q13. Why are irredeemable debentures also known as perpetual debentures?

Ans. Irredeemable debentures are called perpetual debentures because these are not repayable during the
life span of the company.

Understanding
Q14. Amount raised by a company by debenture is loan or capital?
Ans. It is a loan on which interest is paid at a specified rate.

Q15. What is the nature of Interest on Debentures?

Ans. Interest on debentures is a charge against the profit which means interest on debentures shall always
be paid whether profits are sufficient or not.

Q16. Give any two points of distinction between a Share and a Debenture.
Ans.

Basis of Distinction Share Debenture

1. Capital vs Loan A share is a part of the Capital of the A debenture is a part of the loan and as
Company, therefore, the shareholders such, the debentureholders are the
2. Dividend vs Interest
are the owners of the Company. creditors of the Company,
A shareholder gets dividend from the A debentureholder gets interest from
Company. the Company,

Q17. Distinguish between shares and debentures on the basis of convertibility.

Ans. Shares cannot be converted into debentures or any other security whereas the debentures can be
converted into shares if the terms so provide.

Q18. Why would an investor prefer to invest in the Debentures of a Company rather than in its Shares?
Ans. An investor would prefer to invest in debentures because :
(i) Interest on debentures is payable irrespective of the Company making a profit or incurring a loss whereas
dividend on shares is paid only when the Company makes profit.
(ii) Debentures are mostly secured whereas a share is always unsecured.

Q19. Why would an investor prefer to invest partly in Shares and partly in Debentures of a Company?
Ans. An investor would prefer to invest partly in shares and partly in debentures because shares provide
liquidity and capital appreciation and debentures provide safety and assured interest.

Q20. Why would an investor prefer to invest in Shares of a Company rather than in its Debentures?

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Ans. An investor would prefer to invest in shares of a Company rather than in its debentures because shares
provide liquidity, capital appreciation and higher rate of return in the form of dividend and bonus shares.

Q21. Are debentures less riskier than shares?

Ans. Yes, because debentures have priority over shares as to repayment in case of winding up of the
Company.

Q22.
Debe

Premium on Issue of Debentures Premium on Redemption of Debentures

1. It is a capital profit. It is a capital loss.

2. It is shown on the Equity and Liabilities side -
under the head -

Application Based
Q23. Pass the necessary journal entry when 10,000 debentures of Rs.100 each are issued as collateral
security against a Bank Loan of Rs.8,00,000.
Ans. Debenture Suspense A/c Dr. 10,00,000
To Debentures A/c 10,00,000
(Issue of 10,000 debentures of Rs. 100 each as collateral security against the bank loan of Rs.8,00,000)
Q24. On 1 st April 2017, Sunrise Limited issued 5,000, 8% debentures of Rs. 100 each at a discount of 5%.
What will be the total amount of interest for the year ending 31st March 2018?
Ans. Rs.40,000.

Q25. Globe Ltd. issues 20,000, 9% debentures of Rs.100 each at a discount of 5% redeemable at the end of

Ans. Rs.2,20,000.

Q26. X Ltd. invited applications for issuing 500, 12% debentures of Rs.100 each at a discount of 5%. These
debentures were redeemable after three years at par. Applications for 600 debentures were received. Pro-
rata allotment was made to all the applicants.
Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable
with application. (C.B.S.E. 2017, Outside Delhi)

Ans. (i)Bank A/c Dr. 57,000

To Debenture Application & Allotment A/c 57,000

(ii) Debenture Application & Allotment A/c Dr. 57,000

Discount on Issue of Debentures A/c Dr. 2,500

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To 12% Debentures A/c 50,000

To Bank A/c 9,500

Problems Based on Incomplete Information

Problem 1.
V K Limited purchased machinery from Modem Equipment Manufacturers Limited. The company paid the
vendors by issue of some equity shares and debentures and the balance through an acceptance in their
favour payable after three months. The accountant of the company while Journalising the above mentioned
transactions left some items blank. You are required to fill in the blanks.
V K Limited
JOURNAL

Date Particulars L.F. Dr. Cr.

Amount Amount

' Rs. Rs.

Machinery A/c Dr.

To

(Purchased machinery for Rs.7,00,000 from Modem

Equipment Manufacturers Ltd.)

Modem Equipment Manufacturers Ltd. Dr.

Loss on Issue of 9% Debentures A/c Dr.

To

To

To Securities Premium Reserve A/c

To Premium on Redemption of Debentures A/c

(Issued Rs. 1,00,000 9% debentures at a discount of 10%,

redeemable at a premium of 10% and 50,000 equity shares
of Rs.10 each issued at a premium of 15%)

Dr.

To

Problem 2.
Fill in the blanks in the following journal entries :
XY Ltd.
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JOURNAL

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

Sundry Assets A/c Dr. 18,00,000

Dr.

To Sundry Creditors A/c 2,00,000

To

(Business of Rohit & Co. purchased for a

consideration of Rs.20,00,000)

Dr. 20,00,000

Dr.

To 8% Debentures A/c

(Paid to Rohit & Co. by issue of 8%Debentures of

Rs.150 each at a discount of Rs.50 per debenture)

Problem 3.
Fill in the blanks in the following journal entries :
X Ltd.
JOURNAL

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

Sundry Assets A/c Dr. 18,00,000

To Sundry Creditors A/c 2,00,000

To

To

(Business of Rohan & Co. purchased for a consideration

of Rs. 15,00,000)

Dr.

Dr.

To 9% Debentures A/c

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ICM 12th Standard Gautam Bery

(Paid to Rohan & Co. by issue of 9%

Debentures of Rs. 150 each at a discount of Rs.50 per
debenture)

Problem 4.
Fill in the missing figures in the following Journal Entries of X Ltd.

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

2018

March 31 Bank A/c Dr.

To Bank Loan A/c

(Loan of Rs. 10,00,000 taken from Canara Bank)

March 31 Debentures Suspense A/c Dr.

To 11% Debentures A/c

(Issue of debentures of Rs.100 each as

collateral security)

BALANCE SHEET OF X LTD.

as at 31st March, 2018

Particulars NoteNo. Currentyear Previousyear

I. EQUITY AND LIABILITIES : Rs. Rs.

Non-Current Liabilities:

Long-term Borrowings 1

Notes to Accounts :

Rs.

(1) Long-term Borrowings :

12,000, 11% Debentures of Rs. 100 each 12,00,000

Less : Debentures Suspense A/c 12,00,000

Bank Loan (On collateral security of Debentures of Rs. 12,00,000)

Problem 5.

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ICM 12th Standard Gautam Bery

Fill in the missing figures in the following Journal entries in the books of Pranshu Ltd. :
JOURNAL

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

Assets A/c Dr. 1,80,000

To Liabilities (Creditors) A/c 40,000

To Ram Ltd.

(Purchase of assets and liabilities of Ram Ltd.)

Ram Ltd. A/c Dr. 1,76,000

To Bank A/c

To 12% Debentures A/c To Securities Premium

Reserve A/c

(Half of the purchase consideration paid by cheque and the

balance settled by issuing 800, 12% Debentures of Rs. 100
each at a premium of )

Problem 6.
Fill in the missing information in the following :
JOURNAL

Date Particulars L.F. Dr. (Rs.) Cr.(Rs.)

Bank A/c Dr.

To 12% Debenture Application & Allotment A/c

(Application money received on .......... Debentures

of Rs. 100 each issued at a discount it of 10%)

12% Debenture Application & Allotment A/c Dr. 18,00,000

Loss on issue of debentures A/c Dr.

To 12% Debentures A/c

To Premium on Redemption A/c

(Transfer of application money to Debentures

Account, issued at a discount of 10% and
redeemable at a premium of 5%)

Problem 7.

ICM [ESTD 1998] 5/E,Rani ka Bagh,Asr 8146216021, 7347453008, 8847214749 Page 47

ICM 12th Standard Gautam Bery

Fill in the blanks in the following cases :

GG Ltd.
JOURNAL

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

Dr.

To

(Application and allotment money received on 2,000, 12%

Debentures of Rs.IOO each issued at a premium of 5% and
redeemable at a premium of 10%)

Dr.

Dr.

To

To

To

( )

ICM [ESTD 1998] 5/E,Rani ka Bagh,Asr 8146216021, 7347453008, 8847214749 Page 48