Worksheet: Issue and Redemption of Debentures | Accountancy Class 12 - Commerce PDF Download

Very Short Answer Practical Questions (1–2 marks each)

Q1: A Ltd issued 2,000, 8% debentures of ₹100 each at par, payable in full on application. Pass the journal entry for issue.

Q2: B Ltd issued 1,000, 10% debentures of ₹100 each at 10% premium, fully payable on application. Pass the journal entry for issue.

Q3: C Ltd issued 3,000, 12% debentures of ₹100 each at 5% discount, payable in full on application. Pass the journal entry.

Q4: Alpha Ltd issued 5,000, 8% debentures of ₹100 each as collateral security for a loan of ₹4,00,000. Pass the journal entry.

Q5: Beta Ltd purchased machinery for ₹7,20,000, paid by issuing 6% debentures of ₹100 each at 20% premium to the vendor. Pass the journal entry.

Q6: C Ltd purchased machinery of ₹7,60,000 and liabilities of ₹1,80,000 for ₹7,60,000 issuing 9% debentures of ₹100 each at 5% discount. Calculate the number of debentures issued.

Q7: Calculate the total discount on issue for:

• X Ltd: 2,500, 10% debentures of ₹100 each at 6% discount
• Y Ltd: 4,000, 9% debentures of ₹100 each at 8% discount

Q8: Calculate the total premium on issue for:

• X Ltd: 3,000, 12% debentures of ₹100 each at 15% premium
• Y Ltd: 2,500, 9% debentures of ₹100 each at 10% premium

Q9: A company issued 10,000 debentures of ₹100 each, redeemable at 5% premium. Calculate total premium on redemption.

Q10: A company issued 5,000, 8% debentures of ₹100 each. Minimum Debenture Redemption Reserve to be created is 25% of redemption value. Calculate minimum DRR.

Q11: Calculate annual interest for one year on:

• 6,000, 12% debentures of ₹100 each

• 5,000, 10% debentures of ₹100 each

Q12: Calculate half-yearly interest on:

• 8,000, 8% debentures of ₹100 each

• 5,000, 10% debentures of ₹100 each

Q13: R Ltd issued 2,000, 11% debentures of ₹100 each at 10% premium. Calculate amount credited to Securities Premium Reserve.

Q14: M Ltd issued 3,000, 9% debentures of ₹100 each at 6% discount. Calculate total discount on issue.

Q15: A company redeems 1,000, 10% debentures of ₹100 each at 6% premium. Calculate total premium on redemption.

Short Answer Practical Questions (3–4 marks each)

Q16: X Ltd invited applications for 500, 12% debentures of ₹100 each at 5% discount. Applications for 600 received, prorata allotment made. Pass journal entries for issue (full amount payable on application).

Q17: X Ltd invited applications for 1,000, 9% debentures of ₹100 each at 6% discount. Applications for 1,200 received, prorata allotment made. Pass journal entries (full amount payable on application).

Q18: Nisha Ltd purchased machinery from Meloni Ltd, paid ₹90,000 by issuing 5% 6,900 6% debentures of ₹100 each at 20% discount and ₹90,000 by bank draft payable after 3 months. Pass journal entries.

Q19: Alpha Ltd issued 10,000, 10% debentures of ₹100 each at 5% discount payable ₹10 application, ₹30 allotment (including discount), balance on first and final call. Fully subscribed, money received. Pass journal entries.

Q20: Tata Ltd issued 5,000, 10% debentures of ₹100 each on 1-Apr-2012, fully subscribed. Interest payable half-yearly, TDS 10%. Pass journal entries for half-year ending 31-Mar-2013 and transfer to Profit & Loss.

Q21: Company issued ₹10,00,000, 9% debentures of ₹10 each on 1-Apr-2020, redeemable at par after 5 years. Creates sinking fund earning 4% p.a. Calculate annual contribution and prepare sinking fund schedule.

Q22: Sargam Ltd issued ₹1,00,000, 6% debentures of ₹10 each at ₹2 premium on 1-Apr-2021, fully subscribed. Interest paid annually. Pass journal entries for 2021-22.

Q23: Nav Lakshmi Ltd invited 3,000, 12% debentures of ₹100 each at ₹50 premium. Received 4,000 applications; 1,000 rejected, refunded. Debentures allotted. Pass entries.

Q24: Narain Laxmi Ltd invited 7,500, 12% debentures of ₹100 each at ₹35 premium. Received 10,000 applications; 2,500 rejected, refunded. Debentures allotted. Pass entries.

Q25: Venus Ltd acquired assets ₹10,00,000 & liabilities ₹1,80,000 of Cayns Ltd for ₹7,60,000. Issued 9% debentures ₹100 each at 5% discount for payment. Calculate debentures issued and pass entries.

Q26: Boots Ltd issued ₹6,00,000, 8% debentures ₹100 each at 6% discount redeemable in 4 equal annual instalments. Pass journal entries & prepare Discount on Issue account showing write-off.

Q27: Pass journal entries & prepare 9% Debentures Account for 7,500, 9% debentures of ₹50 each at 6% discount, redeemable at 10% premium. Show discount write-off & premium provision.

Q28: X Ltd issued 1,000, 9% debentures of ₹100 each at 6% discount, redeemable at 10% premium after 5 years. Pass journal entries and prepare Debentures Account. Calculate loss on issue.

Q29: Pass journal entry for payment of ₹50,000 interest on debentures at 8% for 6 months with no tax deduction.

Q30: Z Ltd issued 2,000, 10% debentures of ₹100 at 5% discount payable ₹10 application, ₹30 allotment (incl discount), balance first & final call. All calls paid. Pass entries.

Q31: Pass journal entry to write off balance of Discount on Issue of Debentures Account (if any) to Profit and Loss Account in year of redemption.

Q32: XYZ Ltd has ₹50,000 balance in Premium on Redemption of Debentures Account. Pass journal entry to transfer this balance to Profit and Loss Account.

Q33: For 5,000, 9% debentures of ₹100 each redeemed at 10% premium, calculate total amount to transfer to Premium on Redemption of Debentures Account.

Q34: X Ltd issued 1,000, 9% debentures of ₹100 each at 6% discount, redeemable at 10% premium after 5 years. Calculate (i) loss on issue (ii) amount shown as Debentures in Balance Sheet on issue date.

Q35: A Ltd issued 4,000, 8% debentures of ₹100 each at 5% discount. Calculate total discount on issue.

Long Answer Practical Questions (5–6 marks each)

Q36: M Ltd issued ₹5,00,000, 10% debentures of ₹100 each on 1-Apr-2019, redeemable at par on 31-Mar-2024. To finance redemption, company creates sinking fund earning 6% p.a. Calculate annual contribution (using formula), prepare sinking fund schedule, sinking fund & investment accounts; show Balance Sheet extract after first year.

Q37: N Ltd issued 8,000, 8% debentures of ₹100 each on 1-Jan-2020 at 5% discount redeemable in 4 equal annual instalments starting end of third year. (i) Pass journal entry for issue (ii) Prepare Debenture Account writing off discount equally over 4 years (iii) Prepare Discount on Issue Account showing write-off schedule.

Q38: P Ltd issued 1,000, 9% debentures of ₹100 each on 1-Apr-2020 at 6% discount redeemable on 31-Mar-2025 at 10% premium. (i) Pass journal entries for issue, transfer of discount to Loss on Issue A/c, transfer of premium on redemption to Premium on Redemption A/c (ii) Prepare 9% Debentures Account (iii) Calculate Loss on Issue & Premium on Redemption amounts.

Q39: R Ltd has ₹10,00,000, 10% debentures of ₹100 each due redemption on 31-Mar-2022 at 5% premium. Balance in P&L Appropriation ₹50,000, General Reserve ₹10,000. (i) Pass journal for transfer of profit to DRR (ii) If debentures redeemed by fresh issue, pass entries for redemption at premium & Balance Sheet presentation assuming DRR created before redemption.

Q40: S Ltd had ₹6,00,000, 9% debentures of ₹100 each redeemable at par on 1-Apr-2023. On that date, company issued new 9% debentures of ₹100 redeemable at par on 1-Apr-2028 to redeem old debentures fully; rest paid in cash. Pass journal entries & show Balance Sheet extract immediately after redemption.