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cbse 12th Standard Accountancy Issue and Redemption of Debentures Important Questions And Answers Study Material - QB365 Set B

Published on: 25/10/2025

Question Set B

cbse 12th Standard Accountancy Issue and Redemption of Debentures Important Questions And Answers Study Material - QB365

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Std: 12th Standard CBSE - Accountancy

chapter: Issue and Redemption of Debentures - Important Questions And Answers

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Questions:

Generic 3

5 x 3 = 15

Anupama Ltd. had 10,000, 9% debentures of Rs.100 each which is due for redemption on March 31,2015. The company has a debenture redemption reserve a balance of Rs.2,00,000 on that date. Record the necessary journal entries at the time of redemption of debentures, assuming that the company has required balance in Debenture Redemption Investment A/c.

Alfa Ltd. issued 10,000,9% debentures of Rs.100 each. Pass the necessary journal entries for issuing of debentures in the following cases:(i) When debentures are issued at par and redeemable at par.
(ii) When the debentures are issued at par and redeemable at premium of 10%.
(iii) When debentures are issued at a premium of 25% to the vendors for the purchase of machinery worth Rs.12,50,000.
(iv) When debentures are issued at a premium of Rs.250 each and are redeemed at par.

Give journal entries in each of the following cases if the face value of a debenture is Rs.100.
(i) A debenture issued at Rs.110 repayable at Rs.100
(ii) A debenture issued at Rs.100 repayable at Rs.105
(iii) A debenture issued at Rs.105 repayable at Rs.105

A Ltd. purchased the business of B Ltd. for Rs.90,000. Payment was made by issue of 12% debentures of Rs.10 each. What journal entries will be made when
(i) debentures are issued at 20% premium?
(ii) debentures are issued at 10% discount?

Vijay Laxmi Ltd. invited applications for issuing 10,000, 12% Debentures of Rs.100 each at a premium of Rs 70 per Debenture. The full amount was payable on application.
Applications were received for 13,500 Debentures. Applications for 3,500 Debentures were rejected and application money was refunded. Debentures were allotted to the remaining applications.
Pass necessary Journal Entries in the books of Vijay Laxmi Ltd. for the above transactions.

Generic 8

2 x 8 = 16

Journalise the following transactions:
(a) 10 debentures issued at Rs.100 repayable at rs. 100.
(b) 10 debentures issued at Rs.95, repayable at rs. 100.
(c) 10 debentures issued at Rs.105, repayable at rs. 100.
(d) 10 debentures issued at Rs.100, repayable at rs. 105.
(e) 10 debentures issued at Rs.95, repayable at rs. 105.

Nav Lakshmi Ltd invited applications for issuing ₹3,000, 12% debentures of ₹100 each at a premium of 50 per debenture. The full amount was payable on application. Applications were received for ₹4,000 debentures. Applications for ₹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 Nav Lakshmi Ltd.

Generic 6

1 x 6 = 6

Zee Ltd purchased plant and machinery for Rs.2,00,000 payable as Rs.40,000 in cash and balance by allotment of 6% debentures of Rs.1,000 each at a premium of 25%. Journalise the above transactions.

Multiple Choice Question

7 x 1 = 7

Discount or loss on issue of debentures to be written off within 12 months of the date of Balance Sheet is shown as

(a)

Other current assets

(b)

Other non current assets

(c)

Other long term liabilities

(d)

Other current liabilities

10.

In case debentures of Rs.10,000 are issued at par but payable at a premium of 10%, the premium payable will be debited to

(a)

Debentures Suspense account

(b)

Premium on redemption of debentures account

(c)

Loss on issue of debentures account

(d)

Both (a) and (c)

11.

Premium on redemption of debentures is in the nature of

(a)

Personal account

(b)

Real account

(c)

Nominal account

(d)

None of these

12.

Debenture holders are

(a)

Owners of the company

(b)

Creditors of the company

(c)

Vendors of the company

(d)

Customers of the company

13.

When debentures are issued at a discount, should be written off the discount

(a)

In the year of the issue of debentures

(b)

Within 5 years of the issue of debentures

(c)

During the life of the debentures

(d)

In the year of redemption of debentures

14.

When debentures are issued as secondary securities it is called

(a)

Issue for consideration other than cash

(b)

Issue as collateral securities

(c)

Issued at a discount

(d)

Issued at premium

15.

What type of debentures can be issued by an Indian company?

(a)

Secured

(b)

Unsecured

(c)

Convertible

(d)

Redeemable

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Answers Key:

Generic 3

5 x 3 = 15

(i) Dr. Bank A/c, Cr. Debenture Redemption Investment A/c by Rs. 1,50,000 i.e., investment made 15% on Rs. 10,00,000 now encased
(ii) Dr. Surplus in Statement of Profit and Loss, Cr. Debenture Redemption Reserve A/c by Rs. 50,000
(iii) Dr. 9% Debentures A/c, Cr. Debentureholders A/c by Rs. 10,00,000 (iv) Dr. Debentureholders, Cr. Bank by Rs. 10,00,000
(v) Dr. Debenture Redemption Reserve, Cr. General Reserve A/c by Rs. 2,50,000.

(i) Dr.Bank A/c; Cr.Debenture Application and Allotment A/c by Rs.10,00,000; Dr.Debenture Application and Allotment A/c; Cr.9% Debentures A/c by Rs.10,00,000.
(ii) Dr.Bank A/c; Cr.Debenture Application and Allotment A/c by Rs.10,00,000; Dr.Debenture Application and Allotment A/c Rs.10,00,000 and Loss on Issue of Debentures A/c Rs.1,00,000; Cr.9% Debentures A/c by Rs.10,00,000 and Premium on Redemption of Debentures A/c Rs.1,00,000.
(iii) Dr.Machinery A/c; Cr. Vendor A/c by Rs.12,50,000; Dr.Vendor A/c Rs.12,50,000; Cr.9% Debentures A/c Rs.10,00,000 and Sacurities Premium Reserve Rs.2,50,000.
(iv)Dr.Bank A/c; Cr.Debenture Application and Allotment A/c by Rs.35,00,000; Dr.Debenture Application and Allotment A/c Rs.35,00,000; Cr.9% Debentures A/c by Rs.10,00,000 and Securities Premium Reserve A/c Rs.25,00,000.

(i) Dr.Bank, Cr.Debenture Application and Allotment A/c by Rs.110; Dr.Debenture Application and Allotment A/c Rs.110, Cr.Debenture Rs.100 and Securties Premium reserve Rs.10.
(ii) Dr.Bank, Cr.Debenture Application and Allotment by Rs.100, Dr.Debenture Application and Allotment Rs.100 and Loss on Issue of Debenture Rs.5; Cr.Debenture Rs.100 and Premium on Redemption of Debenture Rs.5.
(iii) Dr.Bank, Cr.Debenture Application and Allotment A/c by Rs.105; Dr.Debenture Application and Allotment A/c Rs.105 and Loss on Issue of Debentures Rs.5, Cr.debenture Rs.100, Securities Premium Reserve Rs.5 and premium on Redemption of Debenture Rs.5.

Dr.Sundry Assets A/c, Cr.B Ltd. by Rs.90,000,
(i) Dr.B Ltd., Cr.12% Debentures A/c Rs.75,000 and Securities Premium Reserve A/c Rs.15,000
(ii) Dr.B Ltd. Rs.90,000 and Discount on Issue of Debentures A/c Rs.10,000; Cr.12% Debentures A/c Rs.1,00,000.

(a) Dr.Bank A/c, Cr. Debenture Application and Allotment A/c by Rs.22,95,000(i.e., 13,500(d) X Rs.170);
(b) Dr.Debenture Application and Allotment A/c Rs.22,95,000; Cr.12% Debentures A/c, Rs.10,00,000; Securities Premium Reserve A/c Rs.7,00,000 and Bank A/c Rs.5,95,000.

Generic 8

2 x 8 = 16

Date	Particulars		Debit Amt	Credit Amt
(a)	Bank a/c	Dr.	1,000
	To debenture Application a/c			1,000
	(Being Debenture application money received)
	Debenture Application	Dr.	1,000
	To Debenture a/c			1,000
b)	Bank a/c	Dr.	950
	To debenture Application a/c			950
	(Being Debenture application money received)
	Debenture Application	Dr.	950
	Discount on issue of Debenture	Dr.	50
	To Debenturea/c			1,000
	(Being 10 debentures of Rs. 100 each issued at a discount of 5% and repayable at par.)
c)	Bank a/c	Dr.	1,050
	To debenture Application a/c			1,050
	(Being Debenture application money received)
	Debenture Application	Dr.	1,050
	To Debenture a/c			1,000
	To Securities premium a/c			50
	(Being 10 debentures of Rs. 100 each issued at premium of 5% and redeemable at par)
d)	Bank a/c	Dr.	1,000
	To debenture Application a/c			1,000
	(Being Debenture application money received)
	Debenture Application a/c	Dr.	1,000
	Loss on issue of debentures a/c	Dr.	50
	To Debenture a/c			1,000
	To premium on redemption debentures a/c			50
	(Being 10 debentures of Rs. 100 each issued at par bu repayable at a premium of 5%)
e)	Bank a/c	Dr.	950
	To debenture Application a/c			950
	(Being Debenture application money received)
	Debenture Application a/c	Dr.	950
	Loss on issue of debentures a/c	Dr.	100
	To Debentures a/c			1,000
	To premium on redemption of debentures a/c			50
	(Being 10 debentures of Rs.100 each issued at discount of 5% but repayable at a premium of 5%)

Journal
Particulars		Amt(Dr)	Amt(Cr)
Bank No (4,000 x 150)	Dr	6,00,000
To Debenture Application and Allotment A/c			6,00,000
(Being application money received on 4,000 debentures)
Debenture Application and Allotment A/c	Dr	6,00,000
To 12% Debentures A/c (3,000x100)			3,00,000
To Securities Premium Reserve A/c (3,000 x 50)			1,50,000
1,50,000 A/c (1,000 x 150)			1,50,000
(Being-application money transferred to 12% debentures account and excess money refunded)