12th Standard CBSE Accountancy Unit 7 Accounting for Debentures Model Questions Paper | QB365

12th Standard CBSE Syllabus & Materials

12th Standard CBSE

CBSE 12th Economics Government Budget and the Economy Previous year Question Papers Study Material - QB365 Set A

NEW

12th Standard CBSE

CBSE 12th Computer Science Interface Python with MySQL - New Previous year Question Papers Study Material - QB365 Set A

NEW

12th Standard CBSE

CBSE 12th Computer Science Database Concept - New Previous year Question Papers Study Material - QB365 Set A

NEW

12th Standard CBSE

CBSE 12th Computer Science Data Communication - New Previous year Question Papers Study Material - QB365 Set A

NEW

12th Standard CBSE

CBSE 12th Computer Science Data Structures - New Previous year Question Papers Study Material - QB365 Set A

NEW

12th Standard CBSE

CBSE 12th Computer Science Functions - New Previous year Question Papers Study Material - QB365 Set A

12th Standard CBSE Accountancy Unit 7 Accounting for Debentures Model Questions Paper

Published on: 03/08/2019

Accounting for Debentures

Download CBSE Class 12th Standard CBSE Accountancy question papers, sample papers, important questions, and previous year solved papers in PDF format. Get free study materials, NCERT solutions, and exam preparation resources for Class 12th Standard CBSE Accountancy

Questions + Answers key

Take MCQ Accountancy Test

QB365 Student Learing Managemnet System

Std: 12th Standard CBSE - Accountancy

chapter: - Model Question paper

Visit QB365-SLMS - https://www.qb365.in/slms/ Complete Questions and Answers

Questions:

Generic 3

6 x 3 = 18

Why is premium on the issue of debentures considered as a capital profit?

F Ltd. issued Rs.1,00,000, 15% debentures of Rs.100 each at a premium of 5% redeemable at a premium of 10% at the end of 4 years. Assuming the company has the required balance in Debenture Redemption Investment Account. Pass the journal entries at the time of redemption of debentures.

What is meant by irredeemable debentures?

Bright Ltd. issued 2,00,000, 9% debentures of Rs.100 payable as follows:

On Application	Rs 30
On Allotment	Rs 70

The debentures were fully subscribed and all the money was duly received. As per terms of the prospectus, the debentures are redeemable at Rs.110 per debenture. Give necessary entries regarding regarding issue of debentures in the books of company.

X Ltd. purchased machinery for Rs.5,50,000 from Y Ltd. Rs.55,000 were paid by X Ltd. in cash and the balance was paid by issue of 9% depentures of Rs.1,000 each at 10 % premium redeemable after three years. Pass necessary journal entries in the books of the company.

Pass necessary journal entries for the issue of debentures in the following cases:
(i) Rs.50,000, 8% debentures of Rs.100 each issued at par redeemable at 10% Premium.
(ii) Rs.60,000, 8% debentures of Rs.100 each issued at a Premium of 10%, redeemable at par.

1 Marks

1 x 1 = 1

Give the meaning of issue of debentures as a collateral security.

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

2 x 6 = 12

10.

On January 1st, 2006 S ltd issued 1,000 10% debentures of Rs.500 each at par redeemable after 7 years. However the company gave an option to debenture holder to get debentures However the company gave an option to debenture holder to get debentures converted into equity shares of Rs. 100 each at a premium of Rs. 25 per share any time after the expiry of one
Arvind the holder of 200 debentures informed on Jan, 2006 that he wanted to excise the option of conversion of debentures into equity shares.
Pass necessary Journal entries to record the issue of debentures on Jan, 2004 and conversion of debentures on Jan, 2006.

11.

PQR Ltd purchased for cancellation Rs 50,000 of its 15% debentures at Rs 98. The expenses of purchase amounted to Rs 50. Journalise.

Visit QB365-SLMS - https://www.qb365.in/slms/

Answers Key:

Generic 3

6 x 3 = 18

Premium on the issue of debenture is considered a capital profit because it is not an income arising from the normal course of business operations.

(i) Dr. Bank A/c, Cr. Debenture Redemption Investment A/c by Rs. 15,000, i.e., investments made 15% on Rs. 1,00,000 now encased
(ii) Dr. Surplus in Statement of Profit and Loss; Cr. Debenture Redemption Reserve A/c by Rs. 25,000
(iii) Dr. 15% Debentures A/c Rs. 1,00,000 and Premium on Redemption of Debentures; Rs. 10,000; Cr. Debentureholders A/c by Rs. 1,10,000
(iv) Dr. Debentureholders A/c; Cr. Bank A/c by Rs. 1,10,000 (v) Dr. Debenture Redemption Reserve A/c; Cr. General Reserve A/c by Rs. 25,000.

(i) A share is a part of the capital of the company whereas a debentures is a part of loan of the company.
(ii) Shares cannot be converted into debentures whereas debentures can be converted into shares.

(i) Bank A/c, Cr.Debenture Application A/c by 60,00,000,
(ii) Dr. Debenture Application A/c, Cr.9% Debenture A/c by Rs.60,00,000
(iii) Dr. Debentures Allotment A/c Rs.1,40,00,000, and Loss on Issue of Debentures A/c Rs.20,00,000; Cr.9% Debentures A/c 1,40,00,000 and Premium on Redemption of Debentures A/c Rs.20,00,000,
(iv) Dr. Bank A/c, Cr. Debenture Allotment A/c Rs.1,40,00,000.

(i) Dr.Machinery A/c, Cr.Y Ltd. by Rs.5,50,000.
(ii) Dr.Y Ltd., Cr.Cash by Rs.55,000.
(iii) Dr.Y Ltd. Rs.4,95,000; Cr.9% Debentures A/c Rs.4,50,000; Securities Premium Reserve Rs.45,000. (No. of debentures issued 450, i.e., Rs.\(4,95,000\div 1,100\) ).

(i) (a) Dr.Bank A/c, Cr.Debenture Application and Allotment A/c by Rs.50,000
(b) Dr.Debenture Application and Allotment A/c Rs.50,000 and Loss on Issue of Debentures A/c Rs.5,000; Cr.8% Debentures A/c Rs.50,000 and Premium on Redemption of Debentures A/c Rs.5,000.
(ii) (a) Dr.Bank A/c, Cr.Debenture Application and Allotment A/c by Rs.66,000
(b) Dr.Debenture Application and Allotment A/c Rs.66,000, Cr.8% Debentures A/c Rs.60,000 and Securities premium Reserve, Rs.6,000.

1 Marks

1 x 1 = 1

()
When a company takes a loan, the company have to issue debentures as subsidiary secondary security in addition to the principal security, it is called as issue of debentures for collateral security.

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)

Generic 6

2 x 6 = 12

10.

Journal of S Limited

Particulars		Dr.(Rs.)	Cr(Rs.)
Bank a/c	Dr.	5,00,000
To 10% Debenture a/c			5,00,000
( Being Debenture money received)		5,00,000
10% Debenture a/c	Dr.
To Debenture holder a/c			5,00,000
( Being Amount due to debenture holders on redemption.)
10% Debenture a/c	Dr.	1,00,000
To Equity share capital a/c			80,000
To Equity share capital a/c			20,000
( Being payment made to debenture holders)