Issue of Debentures Revision Questions

SYSKNOW ONLINE CLASSROOMS PRIVATE LIMITED
GRADE: XII SUBJECT: ACCOUNTANCY

CURRICULUM: CBSE CHAPTER: ISSUE OF DEBENTURES
ASSIGNMENT NO: REVISION QUESTIONS
1.G. Ltd. a listed company issued 75,00,000, 6% debentures of ₹50 each at par
payable ₹15 on application and ₹35 on the allotment, redeemable at par after 7
years from the date of issue of debentures. Record necessary entries in the books of
the Company.
2. Y. Ltd. issued 2,000, 6% debentures of ₹100 each payable as follows: ₹25 on

the application; ₹50 on the allotment, and ₹25 on first and final call. Record
necessary entries in the books of the company.
3.A. Ltd. issued 10,000, 10% debentures of ₹100 each at a premium of 5% payable
as follows:
₹10 on Application;
₹20 along with premium on allotment and balance on first and final call.
The debentures were fully subscribed and all money was duly received.
Record necessary journal entries. Also, show how the amount will appear in the
balance sheet.
4.A. Ltd. issued 90,00,000, 9% debenture of ₹50 each at a of 8%, redeemable at

par any time after 9 years Record necessary entries in the books of A. Ltd., for the
issue of debentures.
5.A. Ltd. issued 4,000, 9% debentures of ₹ 100 each on the following terms:
₹ 20 on Application;
₹ 20 on Allotment;
₹ 30 on First call; and
₹ 30 on Final call.
The public applied for 4,800 debentures. Applications for 3,600 debentures were
accepted in full. Applications for 800 Debentures were allotted 400 debentures and
applications for 400 Debentures were rejected. All money called and duly received.
Record necessary journal entries.
6.T. Ltd. offered 2,00,000, 8% debenture of ₹ 500 each on June 30, 2014 at a
premium of 10% payable as ₹ 200 on application (including premium) and balance
on allotment, redeemable at par after 8 years. But applications are received for
3,00,000 debentures and the allotment is made on pro-rata basis. All the money due

on application and allotment was received. Record necessary entries regarding

issue of debentures.
7.X. Ltd. invited applications for the issue of 10,000, 14% debentures of ₹100 each
payable as to ₹20 on application, ₹60 on the allotment, and the balance on a call.
The company receives applications for 13,500 debentures, out of which
applications for 8,000 debentures are allotted in full, applications for 5000
debentures were allotted 40% of the received applications, and the remaining
applications were rejected. The surplus money on partially allotted applications is
utilized towards allotment. All the sums due are duly received. Record necessary
journal entries regarding the issue of debentures.
8.R. Ltd. offered 20,00,000, 10% debentures of ₹200 each at a discount of 7%

redeemable at a premium of 8% after 9 years. Record necessary entries in the
books of R. Ltd.
9.
M. Ltd. took over assets of ₹9,00,00,000 and liabilities of ₹70,00,000 of S.Ltd. and
issued 8% debentures of ₹100 each. Record necessary entries in the books of M.
Ltd.
10.B. Ltd. purchased assets of the book value of ₹ 4,00,000 and took over the
liability of ₹ 50,000 from Mohan Bros. It was agreed that the purchase
consideration, settled at ₹ 3,80,000, be paid by issuing debentures of ₹ 100 each.
What Journal entries will be made in the following three cases, if debentures are
issued:
a. at par,
b. at a discount of 10% and
c. at a premium of 10%.
It was agreed that any fraction of debentures be paid in cash.

(Note: Goodwill ₹ 30,000)
11.X. Ltd. purchased a Machinery from Y. Ltd. at an agreed purchase consideration

of ₹4,40,000 to be satisfied by the issue of 12% debentures of ₹100 each at a
premium of ₹10 per debenture. Journalise the transactions.
12.X. Ltd. issued 15,000, 10% debentures of ₹100 each. Give journal entries and
present it in the balance sheet in each of the following cases:

i. The debentures are issued at a premium of 10%;

ii. The debentures are issued at a discount of 5%;
iii. The debentures are issued as a collateral security to bank against a loan of
₹12,00,000; and
iv. The debentures are issued to a supplier of machinery costing ₹13,50,000.
13. Journalise the following:
a. A debenture issued at ₹ 95, repayable at ₹ 100.

b. A debenture issued at ₹ 95, repayable at ₹ 105.
c. A debenture issued at ₹ 100, repayable at ₹ 105.
The face value of debenture in each of the above cases is ₹ 100.
14.A. Ltd. issued 50,00,000, 8% debentures of ₹ 100 at a discount of 6% on April

01, 2018, redeemable at premium of 4% by draw of lots as under:
20,00,000 debentures on March, 2020
Record journal entries for issue of debentures. Prepare discount/loss on issue of
debenture account.
15.A listed company issues the following debentures:
i. 10,000, 12% debentures of ₹100 each at par but redeemable at a premium of

5% after 5 years;
ii. 10,000, 12% debentures of ₹100 each at a discount of 10% but redeemable
at par after 5 years;
iii. 5,000, 12% debentures of ₹1000 each at a premium of 5% but redeemable at
par after 5 years;
iv. 1,000, 12% debentures of ₹100 each issued to a supplier of machinery
costing ₹95,000. The debentures are repayable after 5 years; and
v. 300, 12% debentures of ₹100 each as collateral security to a bank that has
advanced a loan of ₹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.

16.A listed company issued debentures of the face value of ₹ 5,00,000 at a

discount of 6% on April 01, 2014. These debentures are redeemable by annual
drawings of ₹ 1,00,000 made on March 31 each year starting from March 31, 2016.
Give journal entries for issue of debuntures, writing-off discount and regarding
redemption of debentures.
17.B. Ltd. issued 1,000, 12% debentures of ₹100 each on April 01, 2014 at a
discount of 5% redeemable at a premium of 10%. Give journal entries relating to
the issue of debentures and debentures interest for the period ending March 31,
2015 assuming that interest is paid half-yearly on September 30 and March 31 and
tax deducted at source is 10%.

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SYSKNOW ONLINE CLASSROOMS PRIVATE LIMITED

GRADE: XII SUBJECT: ACCOUNTANCY

2. Y. Ltd. issued 2,000, 6% debentures of ₹100 each payable as follows: ₹25 on

4.A. Ltd. issued 90,00,000, 9% debenture of ₹50 each at a of 8%, redeemable at

GRADE: XII SUBJECT: ACCOUNTANCY

on application and allotment was received. Record necessary entries regarding

8.R. Ltd. offered 20,00,000, 10% debentures of ₹200 each at a discount of 7%

It was agreed that any fraction of debentures be paid in cash.

11.X. Ltd. purchased a Machinery from Y. Ltd. at an agreed purchase consideration

GRADE: XII SUBJECT: ACCOUNTANCY

i. The debentures are issued at a premium of 10%;

13. Journalise the following:

a. A debenture issued at ₹ 95, repayable at ₹ 100.

The face value of debenture in each of the above cases is ₹ 100.

14.A. Ltd. issued 50,00,000, 8% debentures of ₹ 100 at a discount of 6% on April

15.A listed company issues the following debentures:

i. 10,000, 12% debentures of ₹100 each at par but redeemable at a premium of

Pass the journal entries to record the:

a. issue of debentures; and

GRADE: XII SUBJECT: ACCOUNTANCY

16.A listed company issued debentures of the face value of ₹ 5,00,000 at a

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