Please see Issue and Redemption of Debentures Exam Questions Class 12 Accountancy below. These important questions with solutions have been prepared based on the latest examination guidelines and syllabus issued by CBSE, NCERT, and KVS. We have provided Class 12 Accountancy Questions and answers for all chapters in your NCERT Book for Class 12 Accountancy. These solved problems for Issue and Redemption of Debentures in Class 12 Accountancy will help you to score more marks in upcoming examinations.
Exam Questions Issue and Redemption of Debentures Class 12 Accountancy
Question. Y ltd issued 20,000, 9% Debentures of Rs.100 each at a discount of 4% on 1st April, 2019, payable Rs.30 on application and the balance on allotment. The debentures are redeemable after 5 years. Pass Journal entries for the issue of debentures and writing off discount on issue of debentures.
Solution: [DEBENTURES ISSUED AT A DISCOUNT]
Question. X ltd purchased building for Rs.22,00,000. Half the payment was made by cheque and the balance half by issue of 9% Debentures of Rs.100 each at a premium of 10%. Pass necessary Journal entries.
Solution:
Number of Debentures issued= (2200000-1100000)÷110=10000 Debentures
Question. Honey ltd issued 10,000, 9% Debentures of Rs.100 each for subscription, payable Rs.60 on application and balance on allotment. Subscription was received for 9000 debentures. Allotment was made and due amount was received.
Pass necessary journal entries for issue and allotment of debentures.
Solution: [UNDER SUBSCRIPTION]
Question. Rohit Ltd. Has issued 50000, 8% Debentures of Rs.100 each at a discount of 9% on July 1, 2019. The company has balance of Rs.5,00,000 in Securities Premium Reserve. Pass necessary journal entries for issue of debentures and to write off discount/loss on issue of debentures. The debentures are redeemable after 5 years at a premium of 7%.
Solution: [Writing off discount/loss on issue of debentures]
Question. A company purchased assets of Rs.990000 from another firm. Payment was by issuing, 11% Debenture of Rs.100 each. Pass journal entries when debentures have been issued at a discount of 10%.
Solution:
Question. Times ltd issued 20000; 10% Debentures of Rs.100 each on 1st April 2018. The issue was fully subscribed. According to the terms of issue, interest is payable on half yearly basis. Pass journal entries for the year ended 31st March,2019 (Ignore TDS)
Solution: [ Interest on Debentures]
Question. Romi ltd acquired assets of Rs.20 lakhs and took over the creditors of Rs. 2 lakhs from Kapil enterprise. Romi ltd issued 8% debentures of Rs.100 each at a discount of 10% as purchase consideration. Record necessary journal entries in the books of Romi ltd.
Solution:
No. of debentures issued=purchase consideration/issue price =18,00,000/(100-10)= 20000 debentures
Question. Z ltd issued 2000, 10% debentures of Rs 100 each, at par. Debentures payable as follows:
Application Rs.40 Allotment Rs.60
The debentures were fully subscribed and all the amount was duly received. Pass the necessary journal entry.
Solution: [DEBENTURES ISSUED AT PAR] 3
Question. Moti ltd. Obtained loan of Rs.120000 from Bank of India and issued 1500; 9% Debentures of Rs.100 each as collateral security. How will be issues of Debentures shown in the Balance Sheet?
Case I. when journal entry is NOT passed.
Case II. When journal entry is passed.
Solution: [ Debentures as collateral Security]
Question. Jyoti ltd. invited applications for 3000;12% Debentures of Rs.100 each at a premium of Rs.50 per Debentures. Full amount was payable on application. Application were received for 4000 debentures. Applications for 1000 debentures were rejected and application money was refunded. Debentures were allotted to the remaining applicants.
Solution: [OVER SUBSCRIPTION]
Question. Bright ltd. issued 5000; 10% Debentures of Rs.100 each on 1st April, 2015. The issue was fully subscribed. According to the terms of issue, interest on debenture is payable half yearly on 30th September and 31st March and the tax deducted at source is 10%. Pass necessary journal entries related to the debenture interest for the year ending 31st March 2016 and transfer of interest on debentures of the year to the statement of profit and loss.
Solution:
Question. On April 1st 2019 X ltd issued 10,000 ,8% Debentures of Rs.100 each at a premium of 5%, to be redeemable at a premium of 10%, after 5 years. The entire amount was payable on application. The issue was oversubscribed to an extent of 10,000 debentures and the allotment was made proportionately to all the applicants. The securities premium account has not been utilised for any other purpose during the year. Give journal entries for the issue of debentures and writing off loss on issue of debentures.
Solution:
Question. X ltd took over the business of Y Ltd. on 01-04-2020. The details of the agreement regarding the assets and liabilities to be taken over are:
It was decided to pay for purchase consideration as Rs.700,000 through cheque and balance by issue of 2,00,000 9%Debentures of Rs.20 each at a premium of 25%. Journalise.
Solution:
Question. A company purchased assets of Rs.9,90,000 from another firm. Payment was by issuing, 11% Debenture of Rs.100 each. Pass journal entries when debentures have been issued at par.
Solution: [ISSUE OF DEBENTURES FOR CONSIDERATION OTHER THAN CASH]
Question. X ltd issued 5000; 9% Debentures of Rs.100 each at a premium of 20% payable:
On Application-Rs.50, On Allotment- Balance
Applications were received for the debentures issued and also the amount due on allotment including premium was received. Pass journal entries for the above.
Solution: [DEBENTURES ISSUED AT PREMIUM]
IN THE BOOKS OF X LTD.
JOURNALS
Question. Pass Journal entries to record the following transaction:
(i) A Ltd. issued 15000; 8% Debentures of Rs. 100 each at discount of 5% to be repaid at par at the end of 5 years.
(ii) A Ltd. Issues 10% Debentures of ` 100 each for the total nominal value of Rs. 80,00,000 at a premium of 5% to be redeemed at par.
(iii) A Ltd. Issues ` 50,00,000; 9% Debentures of ` 100 each at par but redeemable at the end of 10 years at 105%.
(iv) A Ltd. Issued ` Rs40,00,000, 12% debentures of ` 100 each at a discount of 5% repayable at a premium of 10% at the end of 5 years.
(v) A Ltd issued ` 70,000; 12% debentures of ` 100 each at a premium of 5% repayable at 110% at the end of 10 years.
Solution: [Issue of debentures from terms of Redemption]
Question. A company purchased assets of Rs.990000 from another firm. Payment was by issuing, 11% Debenture of Rs.100 each. Pass journal entries when debentures have been issued at a premium of 10%.
Solution:
Question. A ltd. issued 2,000: 9% Debentures of Rs.100 each on the following terms:
Rs.20 on Application: Rs.20 on allotment : Rs.30 on first call: Rs.30 on final call.
The public applied for 2,400 debentures. Applications for 1800 debentures were accepted in full. Applications for 400 Debentures were allotted 200 debentures and applications for 200 debentures were rejected. Pass necessary journal entries.
Solution:
