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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Bhagwati Ltd. took a loan of ₹3,00,000 from IDBI Bank. The company issued 4,000; 9% Debentures of ₹100 each as collateral security for the same. Show how these items will be presented in the Balance Sheet of the company. (AI 2010)
Method 1: When debentures issued as collateral security are shown separately
Bhagwati Ltd. Balance Sheet
| Particulars | Note No. | ₹ |
|---|---|---|
| I. Equity and Liabilities | ||
| 2. Non-Current Liabilities | ||
| a. Long-Term Borrowings | 1 | 3,00,000 |
| Total | 3,00,000 | |
| II. Assets | ||
| 2. Current Assets | ||
| a. Cash and Cash Equivalents | 2 | 3,00,000 |
| Total | 3,00,000 |
NOTES TO ACCOUNTS
| Note No. | Particulars | ₹ |
|---|---|---|
| 1 | Long-Term Borrowings (Secured) | |
| Loan from IDBI (secured by issue of Debentures of ₹4,00,000) | 3,00,000 | |
| 9% Debentures (issued as collateral security against loan) | 4,00,000 | |
| Less: Debenture Suspense Account | (4,00,000) | |
| Total | 3,00,000 | |
| 2 | Cash and Cash Equivalents — Cash at Bank | 3,00,000 |
Method 2 (Alternative): When debentures issued as collateral security are not shown separately
Bhagwati Ltd. Balance Sheet
| Particulars | Note No. | ₹ |
|---|---|---|
| I. Equity and Liabilities | ||
| 2. Non-Current Liabilities | ||
| a. Long-Term Borrowings | 1 | 3,00,000 |
| Total | 3,00,000 | |
| II. Assets | ||
| 2. Current Assets | ||
| a. Cash and Cash Equivalents | 2 | 3,00,000 |
| Total | 3,00,000 |
NOTES TO ACCOUNTS
| Note No. | Particulars | ₹ |
|---|---|---|
| 1 | Long-Term Borrowings (Secured) — Loan from IDBI (secured by issue of 9% Debentures of ₹4,00,000 as collateral security) | 3,00,000 |
| 2 | Cash and Cash Equivalents — Cash at Bank | 3,00,000 |
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.32 - Issue of Debentures", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Issue of Debentures.
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