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Accountancy · 2025 · 3 marks
Issue and Redemption of DebenturesIssue of Debentures for Consideration other than Cash3 marksshort answer
CBSE 2025 · Region 5 · Set 1 · Q19
KM Ltd. acquired assets worth 7,20,000 and took over liabilities of ₹ 2,00,000 of LS Ltd. for a purchase consideration of ₹ 9,60,000. KM Ltd. issued…
KM Ltd. acquired assets worth $\displaystyle 7,20,000$ and took over liabilities of ₹ $\displaystyle 2,00,000$ of LS Ltd. for a purchase consideration of ₹ $\displaystyle 9,60$,000. KM Ltd. issued $\displaystyle 12$% debentures of $\displaystyle 100$ each at a discount of $\displaystyle 4$% in favour of LS Ltd. for payment of purchase consideration. Pass necessary journal entries for the above transactions in the books of KM Ltd.
Varsha Ltd. invited applications for issuing $\displaystyle 2,000$, $\displaystyle 12$% debentures of $\displaystyle 100$ each at a premium of $\displaystyle 30$ per debenture. Full amount was $\displaystyle 3$ $\displaystyle 3$ payable on application. Applications were received for $\displaystyle 5,000$ debentures. Applications for $\displaystyle 3,000$ debentures were rejected and application money was refunded. Debentures were allotted to the remaining applicants. Pass necessary journal entries for the above transactions in the books of Varsha Ltd.
Marking-scheme solution
Books of KM Ltd.
Journal
Date Particulars L.F Dr. Amount Cr. Amount
₹ ₹
(i) Sundry Assets A/c Dr. $\displaystyle 7,20,000$
Goodwill A/c Dr. $\displaystyle 4,40,000$
To Sundry Liabilities A/c $\displaystyle 2,00,000$
To LS Ltd. $\displaystyle 9,60,000$
(Assets acquired and liabilities taken over from
LS Ltd.)
(ii)
LS Ltd. Dr. $\displaystyle 9,60,000$
Discount on issue of Debentures A/c Dr. $\displaystyle 40,000$
$\displaystyle 10,00,000$
To $\displaystyle 12$% Debentures A/c
(Amount of purchase consideration settled
through issue of $\displaystyle 10,000$, $\displaystyle 12$% Debentures at a
discount of $\displaystyle 4$%)
Q.(b) Varsha Ltd. invited applications………………..
Ans. Books of Varsha Ltd.
Journal
Date Particulars L.F Dr. Amount Cr. Amount
₹ ₹
(i)
Bank A/c Dr. $\displaystyle 6,50,000$
To Debenture Application and Allotment A/c $\displaystyle 6,50,000$
(Receipt of application money on $\displaystyle 5,000$, $\displaystyle 12$%
Debentures of ₹$\displaystyle 100$ each issued at a premium of
₹$\displaystyle 30$ per Debenture)
(ii)
Debenture Application and Allotment A/c Dr. $\displaystyle 6,50,000$
To $\displaystyle 12$% Debentures A/c $\displaystyle 2,00,000$
To Securities Premium A/c $\displaystyle 60,000$
To Bank A/c $\displaystyle 3,90,000$
(Transfer of Debenture application money to
Debentures account, Securities premium account
and balance refunded)
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CBSE Class 12 Accountancy past-paper question from the 2025 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.