TS Grewal Solutions for Class 12 Accountancy Vol 2 Chapter 9
TS Grewal Solutions for Class 12 Accountancy Chapter 9- Issue of Debentures is an elementary concept to be learned by the students. Click here to learn more about TS Grewal Accountancy solutions for class 12 in a simple and a step by step method, which is beneficial for the students to score well in their upcoming board exams.
Class 12 TS Grewal Solutions Accountancy Vol 2 Chapter 9:-Download PDF Here
| Board | CBSE |
| Class | Class 12 |
| Subject | Accountancy |
| Chapter | Chapter 9 |
| Chapter Name | Issue of Debentures |
| Number of questions solved | 07 |
| Category | TS Grewal |
Also Check: Important Questions for Issue of Debentures
TS Grewal Solutions for Class 12 Accountancy Chapter 9 – Issue of Debentures
Question 1
X company issued 4,000; 10% debentures of ₹. 100/- each, payable ₹. 20/- on the application and balance amount on the allotment. The debentures are redeemable after 5 years. Applications were received for the issued debentures and allotment was made to all the applicants. The amount was received on due dates.
Pass the necessary journal entries.
Solution:
JOURNAL
| Date | Particulars | L.F. | Dr (₹) | Cr (₹) | |
| Bank A/c | Dr. | 80,000 | |||
| To Debentures application A/c | 80,000 | ||||
| (Being the application money received on 4,000; 10% debentures @ ₹. 20/ debenture) | |||||
| Debenture application A/c | Dr. | 80,000 | |||
| To 10% debentures A/c | 80,000 | ||||
| (Being the allotment of 4,000; 10% debentures of ₹. 100 each) | |||||
| Debenture allotment A/c | Dr. | 3,20,000 | |||
| To 10% debentures A/c | 3,20,000 | ||||
| (Being the amount due on 4,000; 10% debentures on allotment @ ₹.80/- debenture) | |||||
| Bank A/c | Dr. | 3,20,000 | |||
| Debenture allotment A/c | 3,20,000 | ||||
| (Being the amount received against allotment) |
Question 2
Axe Ltd. issued 20,000; 9% debentures of ₹. 100/- each at a discount of 4% on 1st April 2018, payable ₹. 30/- on the application and the balance on the allotment. The debentures are redeemable after 5 years. Pass necessary journal entries.
Solution:
JOURNAL
| Date | Particulars | L.F. | Dr (₹) | Cr (₹) | |
| 2018 April 1 | Bank A/c | Dr. | 6,00,000 | ||
| To Debentures application A/c | 6,00,000 | ||||
| (Being the application money on 20,000; 9% debentures @ ₹. 30/- each received) | |||||
| Debentures application A/c | Dr. | 6,00,000 | |||
| To 9% debentures A/c | 6,00,000 | ||||
| (Being the debentures application money transferred to 9% debenture A/c) | |||||
| Debenture allotment A/c | Dr. | 13,20,000 | |||
| Discount on issue of debentures A/c | Dr. | 80,000 | |||
| To 9% debentures A/c | 14,00,000 | ||||
| (Being the allotment money due on 20,000; 9% debentures) | |||||
| Bank A/c | Dr. | 13,20,000 | |||
| To Debenture allotment A/c | 13,20,000 | ||||
| (Being the amount received on allotment) |
Question 3
Titan Watches Ltd. issued 7,500, 8% debentures of ₹. 100/- each at par for a subscription payable along with the applications. The subscription was received for 7,000 debentures. The debentures were duly allotted. Pass the journal entries.
Solution:
In the books of Titan Watches Ltd.
JOURNAL
| Date | Particulars | L.F. | Dr (₹) | Cr (₹) | |
| Bank A/c | Dr. | 7,00,000 | |||
| To debentures application and allotment A/c | 7,00,000 | ||||
| (Being the applications received for 7,000; 8% debentures @ ₹. 100/- debenture) | |||||
| Debentures application and allotment A/c | Dr. | 7,00,000 | |||
| To 8% debentures A/c | 7,00,000 | ||||
(Being 7,000; 8% debentures of ₹. 100/- each alloted) |
Question 4
Hibiscus Ltd. purchased a piece of land from JNR Ltd. and paid the consideration as follows:
- Issued a cheque for ₹. 10,00,000/-
- Issued a bill exchange for 3 months for ₹. 5,00,000/-
- Issued 5,000; 9% Debentures of ₹. 100/- each at par redeemable at 10% premium after 5 years.
Pass the journal entry.
Solution:
| Date | Particulars | L.F. | Dr (₹) | Cr (₹) | |
| Land A/c | Dr. | 20,00,000 | |||
| Loss on the issue of debentures A/c | Dr. | 50,000 | |||
| To Bank A/c | 10,00,000 | ||||
| To Bills Payable A/c | 5,00,000 | ||||
| To 9% Debentures A/c | 5,00,000 | ||||
| To premium on redemption of debentures A/c | 50,000 | ||||
| (Being the land purchased and consideration paid) |
Question 5
V Ltd. issued 5,000; 9% debentures of ₹. 100/- each at par and also raised a loan of ₹. 80,000/- from the bank, collaterally secured by ₹. 1,00,000/-; 9% debentures. How will be the debentures shown in the balance sheet of the company assuming that the company has passed journal entry for the issue of debentures as collateral security in the books?
Solution:
An Extract of Balance Sheet of V Ltd. as at…
| Particulars | Note No. | ₹ |
| ||
| Non-Current Liabilities | 1 | |
| Long-term Borrowings | 5,80,000 |
Note to Accounts
| ₹ 5,00,000 | |
| 5,000; 9% debentures of ₹.100/- each | 80,000 | |
| Loan from bank | ||
| 1,000; 9% debentures of ₹. 100/- each issued as Collateral Security | 1,00,000 | |
| Less: Debentures Suspense A/c | 1,00,000 | |
| 5,80,000 |
Question 6
Debentures are shown in the Balance Sheet of a firm below the head of,
- Non-current liabilities
- Current liabilities
- Share capital
- None of these
Answer: Non-current liabilities
Question 7
Debentureholders are,
- Owners of the company
- Lenders of the company
- Vendors of the company
- Customers of the company
Answer: Lenders of the company
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