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Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.?
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Aditya Limited issued 20,000 9% debentures of the nominal value of Rs....
Journal Entries for Issuing Debentures
Issuing of debentures is a common way of raising long-term capital for a company. Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 as follows:
(a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000.
(b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value.
(c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominal value.
Let's prepare the necessary journal entries for each of the above transactions:
(a) Issuing Debentures to Sundry Persons
- Nominal Value of debentures issued = Rs. 50,00,000 x 20,000 = Rs. 10,00,00,000
- Cash received = 90% of nominal value = Rs. 9,00,00,000
Journal Entry:
Debenture A/c Dr. Rs. 10,00,00,000
To Cash A/c Rs. 9,00,00,000
To Discount on Debentures A/c Rs. 1,00,00,000
(b) Issuing Debentures to Vendor for Purchase of Fixed Assets
- Nominal Value of debentures issued = Rs. 25,00,000
- Purchase of Fixed Assets = Rs. 20,00,000
Journal Entry:
Fixed Assets A/c Dr. Rs. 20,00,000
To Debenture A/c Rs. 25,00,000
(c) Issuing Debentures to Banker as Collateral Security
- Nominal Value of debentures issued = Rs. 25,00,000
- Loan received from Banker = Rs. 20,00,000
Journal Entry:
Bank Loan A/c Dr. Rs. 20,00,000
To Debenture A/c Rs. 25,00,000
Explanation
In the first transaction, Aditya Limited issued debentures to Sundry Persons for cash. The nominal value of the debentures is Rs. 50,00,000, and the company received 90% of the nominal value in cash. The remaining 10% is the discount on debentures, which is recorded in the Discount on Debentures account.
In the second transaction, Aditya Limited issued debentures to a vendor for the purchase of fixed assets. The nominal value of the debentures is Rs. 25,00,000, and the value of the fixed assets purchased is Rs. 20,00,000. The entry records the issuance of debentures and the purchase of fixed assets.
In the third transaction, Aditya Limited issued debentures to a banker as collateral security for a loan. The nominal value of the debentures is Rs. 25,00,000, and the amount of the loan received from the banker is Rs. 20,00,000. The entry records the issuance of debentures and the receipt of the loan.
Issuing of debentures is a common way of raising long-term capital for a company. Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 as follows:
(a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000.
(b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value.
(c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominal value.
Let's prepare the necessary journal entries for each of the above transactions:
(a) Issuing Debentures to Sundry Persons
- Nominal Value of debentures issued = Rs. 50,00,000 x 20,000 = Rs. 10,00,00,000
- Cash received = 90% of nominal value = Rs. 9,00,00,000
Journal Entry:
Debenture A/c Dr. Rs. 10,00,00,000
To Cash A/c Rs. 9,00,00,000
To Discount on Debentures A/c Rs. 1,00,00,000
(b) Issuing Debentures to Vendor for Purchase of Fixed Assets
- Nominal Value of debentures issued = Rs. 25,00,000
- Purchase of Fixed Assets = Rs. 20,00,000
Journal Entry:
Fixed Assets A/c Dr. Rs. 20,00,000
To Debenture A/c Rs. 25,00,000
(c) Issuing Debentures to Banker as Collateral Security
- Nominal Value of debentures issued = Rs. 25,00,000
- Loan received from Banker = Rs. 20,00,000
Journal Entry:
Bank Loan A/c Dr. Rs. 20,00,000
To Debenture A/c Rs. 25,00,000
Explanation
In the first transaction, Aditya Limited issued debentures to Sundry Persons for cash. The nominal value of the debentures is Rs. 50,00,000, and the company received 90% of the nominal value in cash. The remaining 10% is the discount on debentures, which is recorded in the Discount on Debentures account.
In the second transaction, Aditya Limited issued debentures to a vendor for the purchase of fixed assets. The nominal value of the debentures is Rs. 25,00,000, and the value of the fixed assets purchased is Rs. 20,00,000. The entry records the issuance of debentures and the purchase of fixed assets.
In the third transaction, Aditya Limited issued debentures to a banker as collateral security for a loan. The nominal value of the debentures is Rs. 25,00,000, and the amount of the loan received from the banker is Rs. 20,00,000. The entry records the issuance of debentures and the receipt of the loan.
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Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.?
Question Description
Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.?.
Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.?.
Solutions for Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? in English & in Hindi are available as part of our courses for CA Foundation.
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ample number of questions to practice Aditya Limited issued 20,000 9% debentures of the nominal value of Rs. 1,00,00,000 asfollows: (a) To Sundry persons for cash at 90% of nominal value of Rs. 50,00,000. (b) To a vendor for purchase of fixed assets worth Rs. 20,00,000 - Rs. 25,00,000 nominal value. (c) To the banker as collateral security for a loan of Rs. 20,00,000 - Rs. 25,00,000 nominalvalue. You are required to prepare necessary journal entries.? tests, examples and also practice CA Foundation tests.
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