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T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will be
- a)Rs. 70,000 shown under current liabilities
- b)Rs. 2,10,000 under current liabilities
- c)Rs. 1,40,000 shown along with Debentures
- d)Rs. 2,80,000 under current liabilities
Correct answer is 'A'. Can you explain this answer?
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T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% ...
Calculation of Interest on Debentures:
- The face value of debentures is Rs. 20,00,000
- The discount given is 10%, which means the debentures were issued at Rs. 18,00,000 (20,00,000 - 10% of 20,00,000)
- The rate of interest is 14% per annum
- Interest is paid half-yearly, so the rate of interest for each half-year is 7% (14% divided by 2)
Interest paid on June 30, 2008:
- Interest for the first half-year (April 01, 2008 to June 30, 2008) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is paid on June 30, 2008
Interest accrued but not due on December 31, 2008:
- Interest for the second half-year (July 01, 2008 to December 31, 2008) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is accrued but not due on December 31, 2008
Interest paid on June 30, 2009:
- Interest for the third half-year (January 01, 2009 to June 30, 2009) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is paid on June 30, 2009
Interest accrued but not due on December 31, 2009:
- Interest for the fourth half-year (July 01, 2009 to December 31, 2009) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is accrued but not due on December 31, 2009
Calculation of Interest accrued but not due on March 31, 2010:
- As of March 31, 2010, interest for the fifth half-year (January 01, 2010 to June 30, 2010) is not yet due
- Therefore, the amount of interest accrued but not due as of March 31, 2010 will be the interest for the fourth half-year (July 01, 2009 to December 31, 2009)
- Interest accrued but not due = Rs. 1,40,000
Answer:
- The amount shown as interest accrued but not due in the Balance Sheet as of March 31, 2010 will be Rs. 70,000 shown under current liabilities
- This is because the interest accrued but not due as of March 31, 2010 is only for one half-year (July 01, 2009 to December 31, 2009), which is Rs. 1,40,000
- The face value of debentures is Rs. 20,00,000
- The discount given is 10%, which means the debentures were issued at Rs. 18,00,000 (20,00,000 - 10% of 20,00,000)
- The rate of interest is 14% per annum
- Interest is paid half-yearly, so the rate of interest for each half-year is 7% (14% divided by 2)
Interest paid on June 30, 2008:
- Interest for the first half-year (April 01, 2008 to June 30, 2008) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is paid on June 30, 2008
Interest accrued but not due on December 31, 2008:
- Interest for the second half-year (July 01, 2008 to December 31, 2008) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is accrued but not due on December 31, 2008
Interest paid on June 30, 2009:
- Interest for the third half-year (January 01, 2009 to June 30, 2009) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is paid on June 30, 2009
Interest accrued but not due on December 31, 2009:
- Interest for the fourth half-year (July 01, 2009 to December 31, 2009) is calculated as follows:
- Interest = Face Value * Rate of Interest for Half-year
- Interest = Rs. 20,00,000 * 7% = Rs. 1,40,000
- This interest is accrued but not due on December 31, 2009
Calculation of Interest accrued but not due on March 31, 2010:
- As of March 31, 2010, interest for the fifth half-year (January 01, 2010 to June 30, 2010) is not yet due
- Therefore, the amount of interest accrued but not due as of March 31, 2010 will be the interest for the fourth half-year (July 01, 2009 to December 31, 2009)
- Interest accrued but not due = Rs. 1,40,000
Answer:
- The amount shown as interest accrued but not due in the Balance Sheet as of March 31, 2010 will be Rs. 70,000 shown under current liabilities
- This is because the interest accrued but not due as of March 31, 2010 is only for one half-year (July 01, 2009 to December 31, 2009), which is Rs. 1,40,000
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Community Answer
T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% ...
Interest is paid on 31 December and the books of accounts are closed on 31st March. Thus, for the ascertainment of true net profit and in accordance with the matching concept, the interest of 3 months, viz, January, February and March needs to be accounted for.
20,00,000 * 3/12 * 14% = 70000
is the interest accrued but not yet due which will be shown under the head Current Liabilities according to the provisions of The Companies Act, 2013.
20,00,000 * 3/12 * 14% = 70000
is the interest accrued but not yet due which will be shown under the head Current Liabilities according to the provisions of The Companies Act, 2013.
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T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer?
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T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? 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 T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer?.
T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? 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 T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer?.
Solutions for T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer?, a detailed solution for T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? has been provided alongside types of T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice T Ltd. has issued 14% Debentures of Rs.20,00,000 at a discount of 10% on April 01, 2008 and the company pays interest half-yearly on June 30, and December 31 every year. On March 31, 2010, the amount shown as “interest accrued but not due” in the Balance Sheet will bea)Rs. 70,000 shown under current liabilitiesb)Rs. 2,10,000 under current liabilitiesc)Rs. 1,40,000 shown along with Debenturesd)Rs. 2,80,000 under current liabilitiesCorrect answer is 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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