TIME : 1 HR REVISION- TEST (ISSUE OF DEBENTURE) M.

M : 20

Q.1. What is a bond ? Give two examples of a bond. (2)

Q.2. G Ltd. issued 20,000 , 7 % debentures of 100 each at 5 % premium payable as 30 on application, (4)
60 on allotment, and balance on call. Company received application for 35,000 debentures and
allotment was made on pro-rata basis to the applicants for 30,000 debentures and the rest were rejected.
Excess money was utilized on allotment due. All money was duly received except from Ramesh who
had applied for 18,00 debentures failed to pay allotment money and call money.
Pass necessary journal entries.

Q. 3. X Ltd. On 1st April 2009 acquired assets of the value of Rs.6,00,000 and liabilities worth Rs.60,000 (4)
from Y Ltd. at an agreed value of Rs.5,50,000. X Ltd. Issued 12% Debentures of Rs.100 each at a
premium of 10% in full satisfaction of purchase consideration. The debentures were redeemable
3 years later at a premium of 8%. Pass journal entries at the time of issue of debentures.

Q. 4 . Pass necessary journal entries for the issue of 8 % debentures in the following cases : (3)
(a) 1,000 debentures of 100 each issued at 105 each , repayable at 110 each.
(b) 1,000 debentures of 100 each issued at 95 each , repayable at 100 each.
(c) 1,000 debentures of 100 each issued at 95 each , repayable at 110 each.

Q.5. B. Ltd. issued 1,000, 12% debentures of 100 each on April 01, 2015 at a discount of 5% redeemable at
a premium of 10%.Give journal entries relating to the issue of debentures and debentures interest for the
period ending March 31, 2015 assuming that interest is paid half yearly on September 30 and March 31.
Pass necessary journal entries in the books of B.Ltd. (3)

Q.6. P Ltd had 10,00,000 , 12% debentures of 100 each , outstanding on 1st April, 2020. During the year it
took a loan of 5,00000 from PNB for 5 years by mortgaging Machinery worth 5,00,000 as primary
security. Since bank was not satisfied with the security offered therefore company also issued 2,00000 ,
Debentures of 100 each as Collateral security. Pass necessary journal entries and show the relevant
Items in Company `s balance sheet. (4)