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National company Ltd issued 4000, 12% mortage debenture of Rs 100 each secured on the fixed assets of the company of these 3000 debentures were issued to the public at a premium of 2% while the remaining 1000 debentures were issued to the company's bankers by way of collaterals security against a loan of Rs 75000 . Show how these transactions will be recorded in the company's books and how they will appear in the balance sheet?
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National company Ltd issued 4000, 12% mortage debenture of Rs 100 each...


Issue of 3000 debentures to the public:

- The company will record the issue of 3000 debentures to the public at a premium of 2% by crediting the debenture account with Rs 300,000 (3000 debentures x Rs 100 each) and crediting the premium on debentures account with Rs 6000 (2% of Rs 300,000).

- The corresponding entry will be a debit to the bank account for the total amount received from the public, which is Rs 306,000 (Rs 300,000 for debentures + Rs 6000 premium).

Issue of 1000 debentures to the company's bankers:

- The company will record the issue of 1000 debentures to the company's bankers as collateral security against a loan of Rs 75,000 by crediting the debenture account with Rs 100,000 (1000 debentures x Rs 100 each).

- The corresponding entry will be a debit to the bank account for the loan amount received from the bankers, which is Rs 75,000.

Impact on the balance sheet:

- The 4000 debentures issued will be shown under the long-term liabilities section of the balance sheet.

- The 3000 debentures issued to the public at a premium will be shown as debentures at Rs 300,000 and premium on debentures at Rs 6000 under the liabilities side.

- The 1000 debentures issued to the company's bankers will be shown as debentures at Rs 100,000 under the liabilities side.

- The loan received from the bankers will be shown under the current liabilities section of the balance sheet.
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National company Ltd issued 4000, 12% mortage debenture of Rs 100 each secured on the fixed assets of the company of these 3000 debentures were issued to the public at a premium of 2% while the remaining 1000 debentures were issued to the company's bankers by way of collaterals security against a loan of Rs 75000 . Show how these transactions will be recorded in the company's books and how they will appear in the balance sheet?
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National company Ltd issued 4000, 12% mortage debenture of Rs 100 each secured on the fixed assets of the company of these 3000 debentures were issued to the public at a premium of 2% while the remaining 1000 debentures were issued to the company's bankers by way of collaterals security against a loan of Rs 75000 . Show how these transactions will be recorded in the company's books and how they will appear in the balance sheet? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about National company Ltd issued 4000, 12% mortage debenture of Rs 100 each secured on the fixed assets of the company of these 3000 debentures were issued to the public at a premium of 2% while the remaining 1000 debentures were issued to the company's bankers by way of collaterals security against a loan of Rs 75000 . Show how these transactions will be recorded in the company's books and how they will appear in the balance sheet? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for National company Ltd issued 4000, 12% mortage debenture of Rs 100 each secured on the fixed assets of the company of these 3000 debentures were issued to the public at a premium of 2% while the remaining 1000 debentures were issued to the company's bankers by way of collaterals security against a loan of Rs 75000 . Show how these transactions will be recorded in the company's books and how they will appear in the balance sheet?.
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