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Accountancy · 2024 · 3 marks
Issue and Redemption of DebenturesIssue of Debentures for Consideration other than Cash3 marksshort answer
CBSE 2024 · Region 2 · Set 2 · Q17
Priti Ltd. purchased assets worth ₹ 5,40,000 and took over liabilities of ₹ 1,20,000 of Payal Ltd. for a purchase consideration of ₹ 5,28,000. Priti…
Priti Ltd. purchased assets worth ₹ $\displaystyle 5,40,000$ and took over liabilities of ₹ $\displaystyle 1,20,000$ of Payal Ltd. for a purchase consideration of ₹ $\displaystyle 5,28$,000. Priti Ltd. paid half the amount by cheque and the balance was settled by issuing $\displaystyle 10$% Debentures of ₹ $\displaystyle 100$ each at a premium of $\displaystyle 10$%. Pass necessary journal entries for the above transactions in the books of Priti Ltd.
Dhatu Ltd. invited applications for issuing $\displaystyle 4,000$, $\displaystyle 11$% Debentures of ₹ $\displaystyle 100$ each at a premium of ₹ $\displaystyle 50$ per debenture. Full amount was payable on application. Applications were received for $\displaystyle 5,000$ debentures. Applications for $\displaystyle 1,000$ 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 Dhatu Ltd.
Marking-scheme solution
Books of Priti Ltd.
Journal
Date Particulars L.F Dr. Amount Cr. Amount
₹ ₹
(i)Sundry Assets A/c Dr. $\displaystyle 5,40,000$
Goodwill A/c Dr. $\displaystyle 1,08,000$
To Sundry Liabilities A/c $\displaystyle 1,20,000$
To Payal Ltd. $\displaystyle 5,28,000$
(Assets acquired and liabilities taken over
from Payal Ltd.)
(ii)
Payal Ltd. Dr. $\displaystyle 5,28,000$
To Bank A/c $\displaystyle 2,64,000$
$\displaystyle 2,40,000$
To $\displaystyle 10$% Debentures A/c
$\displaystyle 24,000$
To Securities Premium A/c
(Amount of purchase consideration settled
through issue of cheque and $\displaystyle 2,400$, $\displaystyle 10$%
Debentures at a premium of $\displaystyle 10$%)
Alternatively,
(ii)(a)
Payal Ltd. Dr. $\displaystyle 2,64,000$
To Bank A/c $\displaystyle 2,64,000$
(Amount of purchase consideration paid by
cheque)
(ii)(b)
Payal Ltd. Dr. $\displaystyle 2,64,000$
To $\displaystyle 10$% Debentures A/c $\displaystyle 2,40,000$
To Securities Premium A/c $\displaystyle 24,000$
(Balance amount of purchase consideration
settled through issue of $\displaystyle 2,400$, $\displaystyle 10$%
Debentures at a premium of $\displaystyle 10$%)
Q. (b) Dhatu Ltd. invited applications...............................
Ans.
Books of Dhatu Ltd.
Journal
Date Particulars L.F Dr. Amount Cr. Amount
₹ ₹
(i)
Bank A/c Dr. $\displaystyle 7,50,000$
To Debenture Application and Allotment A/c $\displaystyle 7,50,000$
(Receipt of application money on $\displaystyle 5000$, $\displaystyle 11$%
Debentures of ₹$\displaystyle 100$ each issued at a premium of
₹$\displaystyle 50$ per Debenture)
(ii)
Debenture Application and Allotment A/c Dr. $\displaystyle 7,50,000$
To $\displaystyle 11$% Debentures A/c $\displaystyle 4,00,000$
To Securities Premium A/c $\displaystyle 2,00,000$
To Bank A/c $\displaystyle 1,50,000$
(Transfer of Debenture application money to
Debentures account, Securities premium account
and balance refunded)
Alternatively,
(ii)(a)
Debenture Application and Allotment A/c Dr. $\displaystyle 1,50,000$
To Bank A/c $\displaystyle 1,50,000$
(Refund of excess application money)
(ii)
Debenture Application and Allotment A/c Dr. $\displaystyle 6,00,000$
To $\displaystyle 11$% Debentures A/c $\displaystyle 4,00,000$
To Securities Premium A/c $\displaystyle 2,00,000$
(Transfer of Debenture application money)
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