✓ Board-verified
Accountancy · 2026 · 3 marks
Issue and Redemption of DebenturesIssue of Debentures for Consideration other than Cash3 marksshort answer
CBSE 2026 · Region 5 · Set 1 · Q19
Kiara Ltd. purchased assets worth ₹ 12,40,000 and took over liabilities of 3,40,000 of Amrex Ltd. for a purchase consideration of ₹ 11,00,000. Kiara…
Kiara Ltd. purchased assets worth ₹ $\displaystyle 12,40,000$ and took over liabilities of $\displaystyle 3,40,000$ of Amrex Ltd. for a purchase consideration of ₹ $\displaystyle 11,00$,000. Kiara Ltd. paid half the amount by cheque. The balance amount was settled by issuing $\displaystyle 9$% debentures of $\displaystyle 100$ each at a premium of $\displaystyle 10$%. Pass necessary journal entries for the above transactions in the books of Kiara Ltd.
On 1st April, $\displaystyle 2024$, Zara Ltd. issued $\displaystyle 8,000$, $\displaystyle 9$% Debentures of % $\displaystyle 100$ each at a discount of $\displaystyle 10$%. The company had a balance of $\displaystyle 50,000$ in the Securities Premium Account on the same date. Pass necessary journal entries for the issue of debentures and to write off discount on issue of debentures.
Marking-scheme solution
Books of Kiara Ltd.
Journal
Date Particulars L.F. Dr. Cr.
Amount(₹) Amount(₹)
Sundry Assets A/c Dr. $\displaystyle 12,40,000$
Goodwill A/c Dr. $\displaystyle 2,00,000$
To Sundry Liabilities A/c $\displaystyle 3,40,000$
To Amrex Ltd $\displaystyle 11,00,000$
(Assets and liabilities of Amrex
Ltd. taken over)
Amrex Ltd. Dr. $\displaystyle 11,00,000$
To Bank A/c $\displaystyle 5,50,000$
To $\displaystyle 9$% Debentures A/c $\displaystyle 5,00,000$
To Securities Premium A/c $\displaystyle 50,000$
(Purchase consideration settled by
cheque and issue of $\displaystyle 5,000$ $\displaystyle 9$%
debentures of ₹$\displaystyle 100$ each at $\displaystyle 10$%
premium)
Alternatively, following two
entries may be passed instead of
the above entry:
Amrex Ltd. Dr. $\displaystyle 5,50,000$
To Bank A/c $\displaystyle 5,50,000$
(Paid to Amrex Ltd by cheque)
Amrex Ltd. Dr. $\displaystyle 5,50,000$
To $\displaystyle 9$% Debentures A/c $\displaystyle 5,00,000$
To Securities Premium A/c $\displaystyle 50,000$
(Purchase consideration settled by
issue of $\displaystyle 5,000$ $\displaystyle 9$% debentures of
₹$\displaystyle 100$ each at $\displaystyle 10$% premium)
Q.(b) On 1st April, $\displaystyle 2024$, Zara Ltd. issued $\displaystyle 8,000$, $\displaystyle 9$% Debentures……………….
Ans.
Books of Zara Ltd.
Journal
Date Particulars L.F. Dr. Cr.
Amount(₹) Amount(₹)
$\displaystyle 2024$
Apr $\displaystyle 1$ Bank A/c Dr. $\displaystyle 7,20,000$
To Debenture Application and Allotment A/c $\displaystyle 7,20,000$
(Application money received on $\displaystyle 8,000$
$\displaystyle 9$%debentures of ₹$\displaystyle 100$ each issued at $\displaystyle 10$%
discount)
Debenture Application and Allotment A/c Dr. $\displaystyle 7,20,000$
,, Discount on issue of Debentures A/c Dr. $\displaystyle 80,000$
To $\displaystyle 9$% Debentures A/c $\displaystyle 8,00,000$
($\displaystyle 8,000$ $\displaystyle 9$% debentures of ₹$\displaystyle 100$ each, issued at
$\displaystyle 10$% discount)
$\displaystyle 2025$ Securities Premium A/c Dr. $\displaystyle 50,000$
Mar Statement of Profit and Loss Dr. $\displaystyle 30,000$
$\displaystyle 31$ To Discount on issue of Debentures A/c $\displaystyle 80,000$
(Discount on issue of Debentures written off
using securities premium and balance in
statement of profit and loss)
All Issue and Redemption of Debentures questions2026 question paperPractice Issue and Redemption of Debentures →
More from Issue and Redemption of Debentures
- Maharaja Ltd. took over assets of ₹ 15,00,000 and liabilities of ₹ 2,00,000 of Dolphin Ltd. for an agreed purchase consideration of ₹ 12,60,000. It…2024
- Debentures which can be transferred by way of delivery and the company does not keep any record of the debentureholders are called:2025
- Sinco Ltd. purchased assets of the book value of ₹ 1,98,000 from Dixon Ltd. It was agreed that the purchase consideration be paid by issuing 10%…2023
- On 1st April, 2022, Mega Ltd. issued 30,000, 10% Debentures of ₹ 100 each at a discount of 10%. The total amount of interest due on debentures for…2024
- Satnam Ltd. purchased Building worth ₹ 5,00,000, Plant worth ₹ 4,60,000 and Furniture worth ₹ 2,20,000 from Gurnam Ltd. for a purchase consideration…2022
- Shivalik Ltd. issued 7% debentures of 2 100 each at a discount of 5% on 1st April, 2023. Discount on issue of debentures, ₹ 1,00,000 was completely…2025
- The debentures which do not carry a specific rate of interest are called:2024
- Debentures in respect of which all details including names, addresses and particulars of holding of the debenture holders are entered in a register…2025
CBSE Class 12 Accountancy past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.