NCERT Solutions

Amrit Company Limited purchased assets of the value of Rs. 2,20,000 from another company and agreed to make the payment of purchase consideration by issuing 2,000, 10% debentures of Rs. 100 each at a premium of 10%. Record necessary journal entries.

A company purchased assets of the value of Rs. 1,90,000 from another company and agreed to make the payment of purchase consideration by issuing 2,000, 10% debentures of Rs. 100 each at a discount of 5%. Record necessary journal entries.

Rose Bond Limited purchased a business for Rs. 22,00,000. Purchase Price was paid by 6% debentures. Debentures of Rs. 20,00,000 were issued at a premium of 10% for the purpose. Record necessary journal entries.

Nikhil and Ashwin Limited bought business of Agarwal Limited consisting sundry assts of Rs. 3,60,000, sundry creditors Rs.1,00,000 for a consideration of Rs. 3,07,200. It issued 14% debentures of Rs. 100 each fully paid at a discount of 4% in satisfaction of purchase consideration. Record necessary journal entries.

Raghuveer Limited issued Rs. 10,00,000, 8% debentures as follows to:

Hassan Limited took a loan of Rs. 30,00,000 from a bank against primary security worth Rs. 40,00,000 and issued 4,000, 6% debentures of Rs. 100 each as a collateral security. The company again after one year took a loan of Rs. 50,00,000 from bank against Plant as primary security and deposited 6,000, 6% debentures of Rs. 100 each as collateral security. Record necessary journal entries and prepare balance sheet of the company.

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 lakh. 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 collateral security. Record necessary journal entries and prepare balance sheet of the company.

Nena Limited issued 50,000, 10% debentures of Rs. 100 each on the basis of the following conditions: a. Debentures issued at par and redeemable at par. b. Debentures issued at discount @ 5% and redeemable at par. c. Debentures issued at premium @ 10% and redeemable at par. d. Debentures issued at par and redeemable at premium @ 10%. e. Debentures issued at discount of 5% and redeemable at a premium of 10%. f. Debentures issued at premium of 6% and redeemable at a premium of 4%. Record necessary journal entries in the above mentioned cases at the time of issue of debentures.

Record necessary journal entries in each of the following cases: a. 27,000, 7% debentures of Rs. 100 each issued at par, redeemable at par. b. 25,000, 7% debentures of Rs. 100 each issued at par redeemable at 4% premium. c. 20,000, 7% debentures of Rs. 100 each issued at 5% discount and redeemable at par. d. 30,000, 7% debentures of Rs. 100 each issued at 5% discount and redeemable at 2.5% premium. e. 35,000, 7% debentures of Rs. 100 each issued at 4% premium and redeemable at premium of 5%.

Diwakar enterprises Ltd. Issued 10,00,000, 6% debentures on April 1, 2016. Interest is paid on September 30, 2016 and March 31, 2017. Record necessary journal entries assuming that income tax is deducted @ 10% of the amount of interest.

Laser India Ltd. Issued 7,00,000, 8% debentures of Rs. 100 each at par. Interest is to be paid on these debentures half-yearly on September 30 and March 31, every year. Record necessary journal entries asuming that income tax is deducted @ 10% of the amount of interest.

X Ltd. issued 2,000, 10% debentures of Rs. 100 each at a discount of 8% on April 01, 2019 which are redeemable. It has balance in Securities Premium Reserve of Rs. 30,000. Calculate the amount to be written-off from securities Premium Reserve.

Z Ltd. issued 5,000, 10% debentures of Rs. 100 each at a discount of 10% on 1.4.2019. The debentures are to be redeemed every year by draw of lots - 1,000 debentures to be redeemed every year starting on 31.03.2021. Record the necessary journal entries including the payment of interest and writing off the discount on issue of debentures. The interest is payable on September 30 and March 31. Z Ltd. closes its books of accounts on March 31 every year.

M Ltd. issued 10,000, 8% debentures of Rs. 100 each at a premium of 10% on 1.1.2019. It purchased sundry assets of the value of Rs. 2,50,000 and took over the liabilities of Rs. 60,000 and issued 8% debentures at a discount 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 necessary journal entries in the books of M Ltd. and prepare the extract of balance sheet on 31.03.2020. Ignore interest.

On 1.4.2019, Fast Computers Ltd. issued 20,00,000, 6% debentures of Rs. 100 each at a discount of 4%, redeemable at a premium of 5% after three years. The amount was payable as follows: On application Rs. 50 per debenture, Balance on allotment. Record the necessary journal entries for issue of debentures.

D Ltd. purchased machinery worth Rs. 2,00,000 from E Ltd. on 1.4.2016. Rs. 50,000 were paid immediately and the balance was paid by issue of Rs. 1,60,000, 12% Debentures in D Ltd. Record the necessary journal entries for recording the transactions in the books of D Ltd.

G. Ltd., has Rs. 800 lakh, 10% debentures of Rs. 100 each due for redemption on March 31, 2017. Give journal entries for issue and redemption of debentures.

R. Ltd., issued 88,00,000, 8% debenture of Rs. 50 each at a premium of 5 % on July 1, 2014 redeemable at par by conversion of debentures into shares of Rs. 20 each at a premium of Rs. 2 per share on June 30, 2017. Record necessary entries for redemption of debentures.

C. Ltd. has outstanding 11,00,000, 10% debentures of Rs. 200 each, on April 1, 2017. The Board of Directors have decided to purchase 20% of own debentures for cancellation at Rs. 200 each. Record necessary entries for the same.

On 31 March, 2017 Janta Ltd. converted its Rs. 88,00,000, 6% debentures into equity shares of Rs. 20 each at a premium of Rs. 2 per share. Record necessary journal entries in the books of the company for redemption of debentures.

Anirudh Ltd. has 4,000, 8% debentures of Rs. 100 each due for redemption on March 31, 2017. The company has a debenture redemption reserve of Rs. 50,000 on that date. Assuming that no interest is due, record the necessary journal entries at the time of redemption of debentures.

X Ltd. were to redeem 8,000, 10% debentures of Rs. 100 each on April 1, 2017 at a premium of 5%. The company has a surplus of Rs. 9,00,000 in the statement of profit and loss. The company closes its books on December 31 every year. What journal entries the company will be recording to redeem the above debentures?

G Ltd. issued 5,00,000, 12% debentures of Rs. 100 each on April 1, 2013 redeemable at par on July 1, 2017. The company received applications for 6,00,000 debentures and the allotment was made to all the applicants on pro-rata basis. The debentures were redeemed on due date. How much amount of Debenture Redemption Reserve is to be created before the redemption is carried out? Also record necessary journal entries regarding issue and redemption of debenture. Ignore tax deducted at source.

Explain the different types of debentures?

Distinguish between a debenture and a share. Why debenture is known as loan capital? Explain.

Describe the meaning of 'Debenture Issued as Collateral Securities'. What accounting treatment is given to the issue of debentures in the books of accounts?

Explain the different terms for the issue of debentures with reference to their redemption.

Differentiate between redemption of debentures out of capital and out of profits.

Explain the guidelines of SEBI for creating Debenture Redemption Reserve.

Describe the steps for creating Sinking Fund for redemption of debentures.

What is meant by a Debenture?

What does a Bearer Debenture mean?

State the meaning of 'Debentures issued as a collateral security'.

What is meant by 'Issue of debentures for consideration other than cash'?

What is meant by Issue of debenture at discount and redeemable at premium?

What is 'Capital Reserve'?

What is meant by a 'Irredeemable Debenture'?

What is a 'Convertible Debenture'?

What is meant by 'Mortgaged Debentures'?

What is discount on issue of debentures?

What is meant by 'Premium on Redemption of Debentures'?

How debentures are different from shares? Give two points.

What is meant by redemption of debentures?

Can the company purchase its own debentures?

What is meant by redemption of debentures by conversion?

How would you deal with 'Premium on Redemption of Debentures?

What is meant by redemption of debentures by "Purchase in Open Market"?

Issue of debentures to a vendor in consideration of business purchase.

Issue of debentures at a discount.

Issue of debentures issued at a discount redeemable at a premium.

Purchase of own debentures by a company.

Writing off discount on issue of debentures.

Debentures issued at a discount and are redeemable at par.

Issue of debentures at a premium.

Issue of debentures at a discount redeemable at a premium.

Issue of debentures at a premium redeemable at a premium.

Writing off discount on issue of debentures.

Debenture is a part of owned capital.

The payment of interest on debentures is a charge on the profits of the company.

The debentures cannot be issued at a discount of more than 10% of the face value.

Redeemable debentures are those debentures, which are payable on the expiry of the specific period.

Perpetual debentures are also known as irredeemable debentures.

Debentures cannot be converted into shares.

Debentures cannot be issued at a premium.

A collateral security is a subsidiary security.

Debentures cannot be issued at a premium and redeemable at par.

Loss on issue of debentures account is a revenue loss.

Premium on redemption of debentures account is shown under the 'Securities Premium' in the balance sheet.