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S. Singh Ltd. obtained a loan of ₹5,00,000 from State Bank of India @ 10% p.a. interest. The company issued ₹7,50,000; 10% Debentures of ₹100 each in favour of State Bank of India as collateral security. Pass the necessary Journal entries for the above transactions: (i) when the company decides not to record the issue of the 10% Debentures as collateral security; (ii) when the company decides to record the issue of the 10% Debentures as collateral security. (Sample Paper 2018-19)
(i) When the company decides not to record the issue of debentures as collateral security
JOURNAL (Books of S. Singh Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 5,00,000 | |||
| To Bank Loan A/c | 5,00,000 | |||
| (Bank loan taken from State Bank of India @ 10% p.a. interest) |
(ii) When the company decides to record the issue of debentures as collateral security
JOURNAL (Books of S. Singh Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 5,00,000 | |||
| To Bank Loan A/c | 5,00,000 | |||
| (Bank loan taken from State Bank of India @ 10% p.a. interest) | ||||
| Debenture Suspense A/c Dr. | 7,50,000 | |||
| To 10% Debentures A/c | 7,50,000 | |||
| (7,500; 10% Debentures issued as collateral security) |
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.33 - 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.
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