Question 17 Chapter 9 of +2-Part-1
17. (Issue at discount/Call in advance) A limited company made an issue of 10,000, 14% debentures of Rs. 100 each at 5% discount, which was fully subscribed. The debentures were allotted on 31st July, 2017 subscription being payable 10% on application, 40% on allotment 25% on 30th September, 2017 and the balance on 30th November, 2017.
Under the terms of issue, payment could be made in full on 31st July, 2017. Interest on any such repayment is payable at the rate of 12% per annum. Such interest is not deductible from the subscriber’s payment, but is payable by the company on 30th November, 2017.
The allotee of 500 debentures took advantage of the pre- payment terms, while others paid on the due dates.
Journalise the entries to be made in the company’s book
The solution of Question 17 Chapter 9 of +2 Part-1:-
| Journal |
|||||
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
| 2018 | Bank A/c | Dr. | 1,00,000 | ||
| July 1 | To Debentures Application A/c | 1,00,000 | |||
| (Being application money received on @ ₹ 10 on 10,000 debentures) | |||||
| Debentures Application A/c | Dr. | 1,00,000 | |||
| To 14% Debentures A/c | 1,00,000 | ||||
| (Being transfer of application money) | |||||
| July 31 | Debentures Allotment A/c | Dr. | 4,00,000 | ||
| Discount on issues of Debentures A/c | Dr. | 50,000 | |||
| To 14% Debentures A/c | 4,50,000 | ||||
| (Being allotment money due & discount on issue credited to debentures A/c) | |||||
| Bank A/c | Dr. | 4,22,500 | |||
| To Debentures allotment A/c | 4,00,000 | ||||
| To calls –in- advance A/c | 22,500 | ||||
| (Being amount received on allotment + calls-in-advance on 5000 debentures) | |||||
| Debentures first call A/c | Dr. | 2,50,000 | |||
| To 14% Debentures A/c | 2,50,000 | ||||
| (Being amount due on first call) | |||||
| Sept. 1 | Bank A/c | Dr. | 2,37,500 | ||
| Calls-in-advance A/c | 12,500 | ||||
| To Debentures first call A/c | 2,50,000 | ||||
| (Being amount received on first call on 89,500 debentures & balance charged to calls-in-advance) | |||||
| Debentures final A/c | Dr. | 2,00,000 | |||
| To 14% Debentures A/c | 2,00,000 | ||||
| (Being amount due on final call on 10,00 debentures @ Rs. 20 per debentures) | |||||
| Nov 30 | Bank A/c | Dr. | 1,90,000 | ||
| Calls-in-advance A/c | Dr. | 10,000 | |||
| To Debentures first call A/c | 2,00,000 | ||||
| (Being amount received on final call) | |||||
| Interest on calls-in-arrears A/c | Dr. | 650 | |||
| To Bank A/c | 650 | ||||
| (Being payment of interest on calls-in-advance ) | |||||
1. Amount due per debentures on final call :
Nominal value – (Application + Allotment + Discount + First call )
i.e, 100 -(10 + 40 + 5 + 25) = Rs. 20
2. Amount received as calls-in-advance :
500 (25+20) = Rs. 22,500
3. Interest payable on calls-in-advance :
(i) 22,500 X 12% X 2/12 = Rs. 450[ August September ]
(ii) 10,000 X 12% X 2/12 = Rs. 200/650 [ October November ]
It all about Question 17 Chapter 9 of +2-Part-1, If you have any problem please comment below.
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Issue of Debentures from the point of view of Redemption
End of Solution
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Question 30 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Chapter No. 8 – Company Accounts (Share Capital)
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Chapter No. 9 – Company Accounts (Issue of Debentures)
Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 14 – Accounting Ratios
Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
- Chapter No. 6 – Tools/Methods of Financial Analysis
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
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