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Test: Issue Of Debentures - 1 - Commerce MCQ


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30 Questions MCQ Test Accountancy Class 12 - Test: Issue Of Debentures - 1

Test: Issue Of Debentures - 1 for Commerce 2024 is part of Accountancy Class 12 preparation. The Test: Issue Of Debentures - 1 questions and answers have been prepared according to the Commerce exam syllabus.The Test: Issue Of Debentures - 1 MCQs are made for Commerce 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Issue Of Debentures - 1 below.
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Test: Issue Of Debentures - 1 - Question 1

 Which of the following is/are true with respect to debentures?

Test: Issue Of Debentures - 1 - Question 2

 Which of the following statements is false?

Test: Issue Of Debentures - 1 - Question 3

W Ltd. issued 20,000, 8% debentures of Rs. 10 each at par, which are redeemable after 5 years at a premium of 20%. The amount of loss on redemption of debentures to be written of every year will be:

Test: Issue Of Debentures - 1 - Question 4

P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is: 

Test: Issue Of Debentures - 1 - Question 5

The underwriting commission in case of issue of debentures can’t exceed:

Detailed Solution for Test: Issue Of Debentures - 1 - Question 5

According to Companies Act, underwriting commission should not exceed 5 per cent of the nominal value of a share and 2½ per cent in the case of debentures.

Test: Issue Of Debentures - 1 - Question 6

 When debentures are issued as collateral security, the final entry for recording the collateral debentures in the books is __________.

Test: Issue Of Debentures - 1 - Question 7

Deep Ltd. issued 1,00,000 7% Debentures of Rs. 100 each at a discount of 4% redeemable after 5 years at a premium of 6%. Loss on issue of debentures is : 

Test: Issue Of Debentures - 1 - Question 8

T Ltd. has issued 14% Debentures of Rs. 20,00,000 at a discount of 10% on April 01,2004 and the company pays interest half-yearly on June 30 and December 31 every year. On March 31, 2006, the amount shown as “interest accrued but not due” in the Balance sheet will be

Test: Issue Of Debentures - 1 - Question 9

F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a discount of 20%. The debenture account was credited with ________.

Detailed Solution for Test: Issue Of Debentures - 1 - Question 9

Value of machinery = 4,00,000

Debenture cost =100 issued at 20% discount 

                           =80

No. of Debenture = 4,00,000/80= 5,000

Jounral entry; 

F Ltd. A/C Dr.4,00,000

Debenture issued at at discount Dr. 1,00,000

To 10% Debenture A/C =5,00,000

Test: Issue Of Debentures - 1 - Question 10

 T Ltd. purchased land & building from U Ltd. for a value of Rs. 2,00,000. The consideration was paid by issue of 12% debentures of Rs. 100 each at a discount of 20%. The debentures account will be credited with: 

Test: Issue Of Debentures - 1 - Question 11

Loss on issue of debentures is generally written off in:

Test: Issue Of Debentures - 1 - Question 12

In the balance sheet of a Company, Debentures are shown under the head: 

Test: Issue Of Debentures - 1 - Question 13

A company issued 1,00,000 12% debentures of Rs. 100 each. Calculate the amount of interest on debentures.

Test: Issue Of Debentures - 1 - Question 14

Loss on issue of debenture is generally written off in ___________

Test: Issue Of Debentures - 1 - Question 15

Premium on redemption of debentures account appearing in the balance sheet is _______________.

Test: Issue Of Debentures - 1 - Question 16

A sent some goods costing Rs. 3,500 at a profit of 25% on sale or return basis. B returned goods amounting to Rs. 800 at Invoice value. At the end of the accounting period on March 31st 2009, the remaining goods were neither returned nor approved by B. The stock on approval will be shown in B/S as:

Test: Issue Of Debentures - 1 - Question 17

6000 debentures were discharged by issuing Equity Shares of Rs. 10 each at 20% Premium. Find the number of shares issued. 

Detailed Solution for Test: Issue Of Debentures - 1 - Question 17

The number of equity shares issued will be 5,000. 

We can find the number by following the steps given below-

We know that the amount of premium is calculated on the face value of the share.

Amount of premium=20% of the face value of a share

=20% of Rs. 10

=20×10/100

=Rs.2

So, the value per equity share= Face value of share+ amount of premium

=10+2

= Rs.12

Amount to be raised by issuing debentures= Number of debentures× face value of debentures

=6000×10

= Rs.60,000

Now, we know that the debentures were discharged and this amount is to be raised by issues equity shares.

So, the number of shares to be issued will be calculated by dividing the amount to be raised by the value per equity share

Number of equity shares= Amount to be raised by issuing shares/ Value per share

=60,000/12

=5,000

 

Therefore, the number of equity shares issued will be 5,000.

Test: Issue Of Debentures - 1 - Question 18

 F Ltd. purchased machinery for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% Debenture of Rs. 100 each @ discount of 20%. The debenture account will be credited by: 

Test: Issue Of Debentures - 1 - Question 19

Which of the following is false?

Test: Issue Of Debentures - 1 - Question 20

Loss on issue of debentures is treated as ___________.

Detailed Solution for Test: Issue Of Debentures - 1 - Question 20

Correct option is D)

Loss on issue of debentures eans the difference between the Redeemable Value and the Face Value. It is treated as a Miscellaneous expenditure and is debited to "Loss on Issue of Debentures Account."

Test: Issue Of Debentures - 1 - Question 21

Which of the following statements is false?

Test: Issue Of Debentures - 1 - Question 22

A Ltd. issued 10,000 12% Debentures of Rs. 10 each at par which are redeemable at the end of each year in equal lots in 5 years at a premium of 30%. The amount of loss on redemption of debentures to be written off in fourth and fifth year will be:

Detailed Solution for Test: Issue Of Debentures - 1 - Question 22

Loss on Redemption of Debentures

To calculate the loss on redemption of debentures in the fourth and fifth year, we need to consider the premium amount and the face value of the debentures.

Given:
- Number of debentures issued = 10,000
- Face value of each debenture = Rs. 10
- Premium on each debenture = 30%

Step 1: Calculate the Premium Amount

The premium on each debenture is 30% of the face value. So, the premium amount per debenture is:

Premium amount = 30/100 * Rs. 10 = Rs. 3

Step 2: Calculate the Total Premium Amount

To calculate the total premium amount, we multiply the premium amount per debenture by the number of debentures issued.

Total Premium Amount = Rs. 3 * 10,000 = Rs. 30,000

Step 3: Calculate the Redemption Value

The redemption value is the sum of the face value and the premium amount. In this case, since the debentures are redeemable in equal lots over 5 years, the redemption value will remain the same for each lot.

Redemption Value = Face Value + Premium Amount = Rs. 10 + Rs. 3 = Rs. 13

Step 4: Calculate the Loss on Redemption

The loss on redemption is the difference between the redemption value and the face value. In this case, since the debentures were issued at par, the face value is equal to the issue price.

Loss on Redemption = Redemption Value - Face Value = Rs. 13 - Rs. 10 = Rs. 3

Step 5: Allocate the Loss on Redemption

Since the debentures are redeemable in equal lots over 5 years, we need to allocate the loss on redemption over these years. The total loss on redemption is Rs. 3 for each debenture.

In the fourth year, 1/5th of the debentures will be redeemed. So, the loss on redemption in the fourth year will be:

Loss on Redemption in Fourth Year = Rs. 3 * (1/5) * 10,000 = Rs. 6,000

In the fifth year, the remaining 4/5th of the debentures will be redeemed. So, the loss on redemption in the fifth year will be:

Loss on Redemption in Fifth Year = Rs. 3 * (4/5) * 10,000 = Rs. 24,000

Therefore, the correct answer is option D: Rs. 6,000, Rs. 24,000.

Test: Issue Of Debentures - 1 - Question 23

A debenture holder gets :

Test: Issue Of Debentures - 1 - Question 24

W Ltd. issued 20,000, 8% debentures of Rs. 10 each at par, which are redeemable after 5 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year will be

Test: Issue Of Debentures - 1 - Question 25

When debentures are issued as collateral security, interest is paid on: 

Test: Issue Of Debentures - 1 - Question 26

 When Debentures are issued as Collateral Security, which entry has to be passed :

Test: Issue Of Debentures - 1 - Question 27

Which of the following statements is true?

Test: Issue Of Debentures - 1 - Question 28

 Debenture holders are called __________ of the Company 

Test: Issue Of Debentures - 1 - Question 29

On May 01, 2004 U Ltd. issued 7% 10,000 convertible debentures of Rs. 100 each at a premium of 20%. Interest is payable on September 30 and March 31 every year. Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to profit and loss account for the year ended March 31, 2005 =?

Test: Issue Of Debentures - 1 - Question 30

 Debentures interest

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