Chapter - Issue of Debentures
Q1. ABC Ltd. Purchased for cancellation its own 5,000, 9% Debentures of100 each for 95 per debenture. The brokerage charges15,000 were incurred. Calculate the amount to be transferred to capital reserve.
Q2. Where is the debenture redemption reserve is shown in the balance sheet?
Q3. Rule 18 (7) of Companies (Share Capital and Debentures) Rules, 2014 exempts the following types of Companies from creating DRR__________________ & ____________________.
Q4. Explain with an imaginary example how issue of debenture as collateral security is shown in the balance sheet of a company when it is recorded in the books of accounts .
Q5. King Ltd took over Assets of 25,00,000 and liabilities of 6,00,000 of Queen Ltd. King Ltd paid the purchase consideration by issuing 10,000 debentures of 100 each at a premium of 10% and 11,00,000 by Bank Draft. Pass necessary journal entries.
Q6. Thandak Refrigerators Limited purchased for cancellation its own 5,000; 6% Debentures of Rs.200 each at Rs. 190 per debenture. It also purchased another lot of 600, 6% debentures of the same series at Rs.186 per debenture expenses on the purchase incurred amounted to Rs.1000. Pass the necessary Journal entries.
Q7. Ruchi Ltd issued 42,000, 7% Debentures of 100 each on 1st April, 2011, redeemable at a premium of 8% on 31st March 2015. The Company decided to create required Debenture Redemption Reserve on 31st March 2014. The company invested the funds as required by law in a fixed deposit with State Bank of India on 1st April, 2014 earning interest @10% per annum. Tax was deducted at source by
the bank on interest @10% per annum. Pass necessary Journal Entries regarding issue and redemption of debentures.
Q8. X Ltd. redeemed Rs.20,00,000, 6% debentures at a premium of 5% out of profits on 31-3-2015. The company had a Debenture Redemption Reserve of Rs.2,50,000. Assuming that the Company has the required balance in Debenture Redemption Investment Account, pass necessary journal entries for the redemption of debentures.
Q9. X ltd. issued 6,000, 12% debentures of Rs.200 each on April 01, 2010 at a discount of 15% redeemable at a premium of 20%. Give journal entries relating to the issue of debentures and debentures interest for the period ending March 31, 2011 assuming that interest is paid half yearly on September 30 and March 31 and tax deducted at source is 20%. Pass necessary journal entries
Q10. X ltd. Purchased assets of Rs.6,00,000 and liabilities of Rs.1,00,000 at an agreed value of Rs.5,50,000 on 30/6/2011 from Y ltd. The company issued 6% debentures of Rs.100 each at a premium of 10% to redeemed on 30/6/15 at a premium of 5%. Pass necessary journal entries for the redemption of debentures