Question 16 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 16 Chapter 9 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 16 Chapter 9 of +2-Part-1

16. (Calls in advance/Interest on calls in advance) Merchants Debentures Issued 1000 , 8 % debentures of Rs. 500 each at par payable as under:

₹ 100 on application on 1st January , 2018
₹ 120 on allotment on 1st March , 2018
₹ 130 on first call on 1st June, 2018.
₹ 150 on final call on 1st Oct., 2018

Applications for the debentures were received in full and allotment was made. One debenture holder holding Rs. 40 debentures paid the amount of first and second1st Oct., 2018calls with allotment. According to the articles of association 10% interest on calls in advance is payable.
Pass necessary journal entries in the books of company assuming that interest on calls in advance was paid on 1st October, 2018.

The solution of Question 16 Chapter 9 of +2 Part-1: –

Calculation of interest on calls-in- advance on March 1,2018

Amount received as calls-in-advance = 40(130+150)= Rs. 11,200

Out of which Rs. 5,200 is to be appropriated as first call money on June , 1 2018.

Interest on Rs. 5,200 @ 10 % premium pre annum for 3 months = Rs. 130

(i) Remaining amount (11,200-5,200) Rs. 6,000 to be appropriated as second final call on October 1, 2018

Interest on Rs. 6,000 @ 10 % premium pre annum for 7 months = Rs. 350

(ii) Total interest paid on Oct. 1, 2018 = 130+350= Rs. 480

Journal
Date   Particulars
L.F. Debit Credit ₹
2018 Bank A/c Dr.   1,00,000  
Jan 1 To Debenture Application A/c       1,00,000
  (Being app. Money received )      
         
  Debentures Application A/c Dr.   1,00,000  
  To 8% Debentures A/c     1,00,000
  (Being transfer of application money)      
         
Mar 1 Debentures Allotment A/c Dr.   1,20,000  
  To 8% Debentures A/c     1,20,000
  (Being allotment money due )      
         
Mar 1 Bank A/c Dr.   1,31,200  
  To Debentures allotment A/c       1,20,000
  To calls –in- advance A/c       11,200
  (Being amount received on allotment + calls-in-advance on 40 debentures )        
           
June1 Debentures first call A/c Dr.   1,30,000  
  To 8% Debentures A/c       1,30,000
  (Being amount due on first call )        
           
June1 Bank A/c Dr.   1,24,800  
  Calls-in-advance A/c Dr.   5,200  
  To Debentures first call A/c       1,30,000
  (Being amount received on first call )        
           
Oct. 1 Debentures final A/c Dr.   1,50,000  
  To 8% Debentures A/c       1,50,000
  (Being amount due on final call )        
           
Oct. 1 Bank A/c Dr.   1,44,000  
  Calls-in-advance A/c Dr.   6,000  
  To Debentures first call A/c       1,50,000
  (Being amount received on final call )        
           
Oct. 1 Interest on calls-in-arrears A/c Dr.   480  
  To Bank A/c       480
           
           

It all about Question 16 Chapter 9 of +2-Part-1, If you have any problem please comment below.

Issue of Debentures from the point of view of Redemption

You can also Check out the solved question of other Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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