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    Ts Grewal Solutions Class 12 Accountancy Volume 2 Chapter 9

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    samuraisurya58
    This document discusses the issue of debentures by companies. It provides examples of journal entries related to receiving application money for debentures, allotting debentures, and recording debentures as long-term borrowings on the balance sheet. It also answers questions about presenting debentures as liabilities and whether debenture holders are owners or lenders of the company.

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    Ts Grewal Solutions Class 12 Accountancy Volume 2 Chapter 9

    Uploaded by

    samuraisurya58
    16 views6 pages
    This document discusses the issue of debentures by companies. It provides examples of journal entries related to receiving application money for debentures, allotting debentures, and recording debentures as long-term borrowings on the balance sheet. It also answers questions about presenting debentures as liabilities and whether debenture holders are owners or lenders of the company.

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    This document discusses the issue of debentures by companies. It provides examples of journal entries related to receiving application money for debentures, allotting debentures, and recording debentures as long-term borrowings on the balance sheet. It also answers questions about presenting debentures as liabilities and whether debenture holders are owners or lenders of the company.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views6 pages

    Ts Grewal Solutions Class 12 Accountancy Volume 2 Chapter 9

    Uploaded by

    samuraisurya58
    This document discusses the issue of debentures by companies. It provides examples of journal entries related to receiving application money for debentures, allotting debentures, and recording debentures as long-term borrowings on the balance sheet. It also answers questions about presenting debentures as liabilities and whether debenture holders are owners or lenders of the company.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 6

    CHAPTER-9–Issue of Debentures

    Q1
    Solution:
    Please find below the journal entries of the transactions:
    Journal Entries in the Books of X Ltd.
    Date Particulars L.F. Dr (₹) Cr (₹)
    Bank A/c Dr. 80,000
    To 10% Debenture Application A/c 80,000
    (Being receipt of application
    money on 4,000 10% debentures of
    ₹20 each)
    10% Debenture Application A/c Dr. 80,000
    To 10% Debentures A/c 80,000
    (Being transfer of application
    money to debenture A/c)
    10% Debenture Allotment A/c Dr. 3,20,000
    To 10% Debentures A/c 3,20,000

    (Being allotment money due on


    4,000 10% debentures of ₹80 each)
    Bank A/c Dr. 3,20,000
    To 10% Debenture Allotment A/c 3,20,000

    (Being allotment money received)

    Class XII www.vedantu.com TS Grewal Solutions


    (Volume II)
    Q2
    Solution:
    Please find below the journal entries of the transactions:
    Journal Entries in the Books of Axe Ltd.
    Date Particulars L.F. Dr (₹) Cr (₹)
    Bank A/c Dr. 6,00,000
    To 9% Debenture
    6,00,000
    Application A/c
    (Being application money
    received on 20,000 9%
    debentures of ₹30 each)
    Debentures Application A/c Dr. 6,00,000
    To 9% Debentures A/c 6,00,000
    (Being transfer of application
    money to debenture A/c)
    1st
    Debenture Allotment A/c Dr. 13,20,000
    April,
    2018 Discount on Issue of Dr. 80,000
    Debentures A/c
    To 9% Debentures A/c 14,00,000
    (Being allotment money due
    on 20,000 9% debentures and
    discount received)
    Bank A/c Dr. 13,20,000
    To Debenture Allotment
    13,20,000
    A/c
    (Being allotment money
    received)
    Class XII www.vedantu.com TS Grewal Solutions
    (Volume II)
    Q3
    Solution:
    Please find below the journal entries of the transactions:

    Journal Entries in the Books of Titan Watches Ltd.


    Date Particulars L.F. Dr (₹) Cr (₹)

    Bank A/c Dr. 7,00,000

    To Debenture Application
    7,00,000
    and Allotment A/c
    (Being application money
    received for 7,000 8%
    debentures of ₹100 each)
    Debentures Application and
    Dr. 7,00,000
    Allotment A/c
    To 8% Debentures A/c 7,00,000
    (Being transfer of application
    money to debentures A/c)

    Class XII www.vedantu.com TS Grewal Solutions


    (Volume II)
    Q4
    Solution:
    Please find below the journal entries of the transactions:

    Journal Entries in the Books of Hibiscus Ltd.


    Date Particulars L.F. Dr (₹) Cr (₹)
    Dr 20,00,00
    Land A/c
    . 0
    Dr
    Loss on Issue of Debentures A/c 50,000
    .
    10,00,00
    To Bank A/c
    0
    To Bills Payable A/c 5,00,000
    To 9% Debentures A/c 5,00,000
    To Premium on Redemption
    50,000
    of Debentures A/c
    (Being land purchased and
    consideration paid with money
    being transferred into
    debentures A/c issued at par and
    redeemable at 10% premium)

    Class XII www.vedantu.com TS Grewal Solutions


    (Volume II)
    Q5
    Solution:
    Please find below the balance sheet and distribution of long term
    borrowings:

    Balance Sheet of V Ltd.


    as at...

    Particulars Note No. ₹


    EQUITY AND LIABILITIES
    Non-Current Liabilities 1
    Long-term Borrowings 5,80,000

    Note to Accounts:
    Long-term Borrowings
    5,000 9% debentures of ₹100 each 5,00,000
    Loan from bank 80,000
    1,000 9% debentures of ₹100 each issued as
    1,00,000
    Collateral Security
    Less: Debentures Suspense A/c 1,00,000
    5,80,000

    Q6
    Solution:

    Class XII www.vedantu.com TS Grewal Solutions


    (Volume II)
    Debentures are shown in the Balance Sheet of a firm below the head
    of Non- Current Liabilities, because Debentures are borrowings
    made from public for a long term, and the same has to be returned
    to the debenture holder upon maturity of the debenture.

    Q7
    Solution:

    Debenture Holders are the Lenders of the Company and not


    owners because, debentures are considered to be borrowed funds for
    a long, but fixed period of time. Debenture holders have no say in
    the running of the company, thereby making them a long term
    creditor to the business.

    Class XII www.vedantu.com TS Grewal Solutions


    (Volume II)

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