Loading Tutorstips...
✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Best Barcode Ltd. took a loan of ₹5,00,000 from a bank, giving ₹6,00,000; 9% Debentures as collateral security. Pass Journal entries regarding the issue of debentures, if any, and show this loan in the Balance Sheet of the company.
Method 1: When debentures issued as collateral security are not shown separately
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 5,00,000 | |||
| To Loan A/c | 5,00,000 | |||
| (Loan taken, secured by issuing 9% Debentures as collateral security) |
Best Barcode Ltd. Balance Sheet
| Particulars | Note No. | ₹ |
|---|---|---|
| I. Equity and Liabilities | ||
| 2. Non-Current Liabilities | ||
| a. Long-Term Borrowings | 1 | 5,00,000 |
| Total | 5,00,000 | |
| II. Assets | ||
| 2. Current Assets | ||
| a. Cash and Cash Equivalents | 2 | 5,00,000 |
| Total | 5,00,000 |
NOTES TO ACCOUNTS
| Note No. | Particulars | ₹ |
|---|---|---|
| 1 | Long-Term Borrowings (Secured) — Loan (secured by issue of 9% Debentures of ₹6,00,000 as collateral security) | 5,00,000 |
| 2 | Cash and Cash Equivalents — Cash at Bank | 5,00,000 |
Method 2 (Alternative): When debentures issued as collateral security are shown separately
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 5,00,000 | |||
| To Loan A/c | 5,00,000 | |||
| (Loan taken, secured by issuing 9% Debentures as collateral security) | ||||
| Debenture Suspense A/c Dr. | 6,00,000 | |||
| To 9% Debentures A/c | 6,00,000 | |||
| (9% Debentures of ₹6,00,000 issued as collateral security) |
Best Barcode Ltd. Balance Sheet
| Particulars | Note No. | ₹ |
|---|---|---|
| I. Equity and Liabilities | ||
| 2. Non-Current Liabilities | ||
| a. Long-Term Borrowings | 1 | 5,00,000 |
| Total | 5,00,000 | |
| II. Assets | ||
| 2. Current Assets | ||
| a. Cash and Cash Equivalents | 2 | 5,00,000 |
| Total | 5,00,000 |
NOTES TO ACCOUNTS
| Note No. | Particulars | ₹ |
|---|---|---|
| 1 | Long-Term Borrowings (Secured) | |
| Loan (secured by issue of 9% Debentures of ₹6,00,000 as collateral security) | 5,00,000 | |
| 9% Debentures (issued as collateral security to bank against loan) | 6,00,000 | |
| Less: Debenture Suspense Account | (6,00,000) | |
| Total | 5,00,000 | |
| 2 | Cash and Cash Equivalents — Cash at Bank | 5,00,000 |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 2 Q.31 - Issue of Debentures", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Issue of Debentures.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 2 Chapter 2 Q.31 - Issue of Debentures" instantly.