✓ Board-verified
Accountancy · 2024 · 3 marks
Issue and Redemption of DebenturesIssue of Debentures for Consideration other than Cash3 marksshort answer
CBSE 2024 · Region 2 · Set 1 · Q19
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.ORDhatu 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.
OR
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,
(a)
Payal Ltd. Dr. $\displaystyle 2,64,000$
To Bank A/c $\displaystyle 2,64,000$
(Amount of purchase consideration paid by
cheque)
(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)
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…2024
- Debentures which can be transferred by way of delivery and the company does not keep any record of the…2025
- Sinco Ltd. purchased assets of the book value of ₹ 1,98,000 from Dixon Ltd. It was agreed that the purchase…2023
- On 1st April, 2022, Mega Ltd. issued 30,000, 10% Debentures of ₹ 100 each at a discount of 10%. The total…2024
- Satnam Ltd. purchased Building worth ₹ 5,00,000, Plant worth ₹ 4,60,000 and Furniture worth ₹ 2,20,000 from…2022
- Shivalik Ltd. issued 7% debentures of 2 100 each at a discount of 5% on 1st April, 2023. Discount on issue of…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…2025
CBSE Class 12 Accountancy past-paper question from the 2024board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.