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    Abhishek Meher
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    ACCOUNTANCY 500-511

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    accounting

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    © All Rights Reserved
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    11 views12 pages

    Accountancy 500-511

    Uploaded by

    Abhishek Meher
    accounting

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    of 12
    Accounting for Companies :Aecounting for Debentures Securities Premium Reserve A/c will appear on the equity and liabilities side of the Balance Sheet under the head ‘Shareholders’ Funds’ and sub-head 'Reserves and Surplus’ and Premium on Redemption of Debentures A/c will be shown under the head 'Non-current Liabilities' and sub-head ‘Other Long-term Liabilities’. Loss on issue of Debentures A/c will appear on the assets side of the Balance Sheet under the head 'Current/Non-current Assets’ and sub-head ‘Other Current’Non-current Assets’ till it is written off by debiting Securities Premium Reserve A/c ot Statement of Profit and Loss. Mlustration 19 Pass journal entries for the issue of debentures in the following situations: (a) Issued 5,000, 10% Debentures of &4100 each at parand also redeemable at par. (b) Issued 5,000, 10% Debentures of A100 eachat adiscount of 5% but redeemabale atpar. (e) Issued 5,000, 10% Debentures of 100 each ata premium of 10%butredeemable atpar, (4) Issued 5,000, 10% Debentures of 100 cach at par but redeembale at 10% premium (e) Issued 5,000, 10% Debentures of &4100 each ata discount of 5% but redeemable ata premium of 10% (0) Issued 5,000, 10% Debentures of A100 each at a premium of 10% and redeemable ata premium of 20%. Accountancy a Solution : (a) Joumal Date Particulars LF[Dr a [Che BankAle De 5,00,000| ‘To 10% Debentures Application and Allotment A/e 5,00,000] (Being application money received on issue lof 10% Debentures) 10% DebentureApplication and AllotmentAle Dr. |__| 5,00,000] To 10% Debentures A/c 5,00,000| (Being Transfer of application money to 10% Debentures A/c, debentures issued at par) b) Joumal Date Particulars LE[Dr & [Cra Bank Ale Dr | ]4.75,000 ‘To 10% Debenture Application and Allotment Ae 4.75.00 (Being application money received) 10% Debenture Application and AllotmentAle Dr. | | 4.75,000 Discount onissue of Debentures AVe Dr 25,000) To 10% Debentures A/c 5,00,000] (Being Transfer of application money to 10% Debentures Ae, issued at adiscount of 10%) Journal Particulars LF] Dr. Dr 5,50,000 ‘To 10% Debenture Application and Allotment Alc 5,50,000] |(Being application money received on issue of 5,000, 10% Debentures @ M110 each.) 10% Debenture Application and AllowentAle Dr, 3 To 10% Debentures A/c 5.00,000) To Securities Premium Reserve Ale 50,000) (Being application money transferred to 10% [Debenture A/c, issued ata premium of 10%) Coll Accounting for Companies :Aecounting for Debentures @ Joumal [Date| Particulars LE[Dr & [Cra Bank Ave De 5,00,000] ‘To 10%Debenture Application and Allotment A/c Pee (Being application money received on issue of 10% Debentures M100 each) 10% Debenture Application and AllotmentAleé Dr. 500,000] Loss on issue of Debentures A/c Dr 50,000) To 10% Debentures Ale 5,00,000] ToPremium on Redemption of Debentures Ale 50,000] (Being transfer ofapplication money to 10% Debentures Alc issued at par but redeemable at a premium of 10%) © Joumal Date Particulars LF[Dr & [Cr Bank Are De | /4.75;000 |To 10% Debentures Application and Allotment Ale 475,000 | Being application money received [on 5.000 10% Debentures @K95 each)) 10% Debenture Application andAllotmentAle De] — | 4.75,000 Losson issue of Debentures A/c 75,000 To 10% Debentures Ae 5,00,000] To Premium on Redemption of Debentures A/c 50,000] (Being Transfer of application money to 10% Debentures A/c, isuedata discount of 3% but redeemable at premium of 10%) Note : Loss on issue of Debentures A/c has been debited by &75,000, ic. total of discount on issue &25,000 and premium on redemption 450,000, (fae Particulars LF] Dr a [Cr a BankAte De] [5.50000 To 10% Debenture Application and Allotment A‘e 5,50,000] (Being application money received on 5.000, 10% Debentures @A110 each.) Acoounansy a mt ATe 10% Debenture Application and ATK Losson issue of Debentures A/c To 10% Debentures A/c “To Securities Premium Reserve Ale To Premium on Redemption of Debenture Ale (Being transfer of application money to 10% Debentures A/c, issued at premium of 10% bbutredeemable ata premium of 20%) Laxmi Ltd. issued 10,000, 14% Debentures of & 100 each ata discount of 5% but redeemable at a premium of 10%. The amount was payable as follows, On application 60 per debenture and the balance on allotment. Public applied for all the debentures. Debentures were duly allotted and the amounts due were realised. Pass necessary journal entries for issue of debentures. Solution : Books of Laxmi Ltd. Jounal Date Particulars LE Dee Cee Bank ATe To 14% Debenture Application Alc Being application money received on 10,000 14% Debentures (@h60 perdebenture) 14% Debenture Application A’e To 14% Debentures A’e (Being Transfer of application money to 14% Debentures A/c) 14% Debenture Allotment Ale Losson issue of Debentures A/e ‘To 14% Debentures A’e ‘To Premium on Redemption of Debentures A/c (Being allotment money duc @&35 cach on 10,000 debentures issued at 5% discount and redeemable at 10% premium, loss onissueof debentures account debited for total of discount on De Dr. ‘issue 50,000 and premium on redemption 1,00,000.) Bank Ale “To 14% Debenture Allotment A/c (Beingallornent money received) De 6,00,000) 6,00,000) 3,50,000| 1,50,000) 3,50,000) 6,00,000] 600,000] 4,00,000| 100,000] 3,50,000] ‘Accounting for Companies Accounting fr Debentures ecru a 10.7 QUESTIONS 1. From the given alternatives, choose and write the correct answer along with its serial number against each bit: (@Debenturcholders are (@)Debtorsofthe company (b) Creditors of the company (6) Customers ofthe company (4) Owner ofthe company (@ Debenturcholders areentiled 9 (@) Dividend ata fixedrate (b) Voting rights in the meetings of the company () Share inthe profits ofthe company (6) Interest ata fixed rate {G)Unamonised portion of Discount on issue of Debentures appears: (@) Onthe Assets side ofthe Balance Sheet (b) On the Equity and Liabilities side of the Balance Sheet (6) in the Statement of Profit and Loss as expense. (6) Inthe Statement of Profit and Lassa income (i) Total amount of Discounton issue of Debentures is writen of (a) In the year of redemption of debentures (b) Daring the ite time ofthe debentures (0 Within yeas ofthe issue of debentures (d) In the year of issue of debentures (©) Onthessueor debentures for consideration other than cash the account credited is (@) Vendor's Ale (by Debtors Ale (©) Debentures Ale (@) Creditors Ale (02) On issue of debentures as collateral security the account debited is (a) Debentures Ale (b) Bank Loan Ale (©) Debentures Suspense Ale (4) Debentureholders Ale (sii) Premium on redemption of Debentures Alc is (2) Personal Account (b)Real Account (©)Nominal Account (@) Intangible Real Account Accountancy

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