Commerce Exam  >  Commerce Questions  >  Pass the necessary journal entries for the is... Start Learning for Free
Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security?
Most Upvoted Answer
Pass the necessary journal entries for the issue of 7% debentures in t...
Journal Entries for Issue of Debentures and Meaning of Debentures as Collateral Security

Issue of 7% Debentures with Different Terms

i. 400 debentures of Rs. 150 each issued at 10% premium redeemable at Rs. 200 per debenture:

Debenture A/c Dr. 66,000
(400 x 150)
Premium on issue of Debentures A/c Dr. 6,600
(10% of 66,000)
To Bank A/c 72,600
(Being the issue of 7% Debentures at a premium)

ii. 400 debentures of Rs. 200 issued at a discount of 10% redeemable at par:

Bank A/c Dr. 72,000
(400 x 200 x 90%)
Discount on issue of Debentures A/c Dr. 8,000
(10% of 80,000)
To Debenture A/c 80,000
(Being the issue of 7% Debentures at a discount)

Meaning of Debentures as Collateral Security

Debentures as collateral security refer to the situation where a company pledges its issued debentures as collateral or security for a loan taken from a lender. In this case, the lender receives the right to sell the debentures in the event of non-repayment of the loan by the company.

Debentures are considered a safe and secure investment option, and hence, lenders are often willing to accept them as collateral. The company issuing the debentures does not have to redeem them immediately, and the lender can hold on to the debentures until the loan is repaid.

This arrangement benefits both parties as the lender receives a secure investment option, and the company receives the necessary funds to meet its financial requirements. However, the company must ensure that it has the means to repay the loan on time, or else it risks losing ownership of the pledged debentures.
Community Answer
Pass the necessary journal entries for the issue of 7% debentures in t...
Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security?

Attention Commerce Students!
To make sure you are not studying endlessly, EduRev has designed Commerce study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in Commerce.
Explore Courses for Commerce exam

Similar Commerce Doubts

Top Courses for Commerce

Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security?
Question Description
Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security?.
Solutions for Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? in English & in Hindi are available as part of our courses for Commerce. Download more important topics, notes, lectures and mock test series for Commerce Exam by signing up for free.
Here you can find the meaning of Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? defined & explained in the simplest way possible. Besides giving the explanation of Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security?, a detailed solution for Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? has been provided alongside types of Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? theory, EduRev gives you an ample number of questions to practice Pass the necessary journal entries for the issue of 7% debentures in the following Cases. i. 400 debentures of Rs 150 each issued at 10% premium redeemable at Rs200 per debenture. ii. 400 debentures of Rs 200 issued at a discount of 10% redeemable at par. iii. What do you mean by issue of debentures as collateral security? tests, examples and also practice Commerce tests.
Explore Courses for Commerce exam

Top Courses for Commerce

Explore Courses
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
10M+ students study on EduRev