Question 17 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 17 Chapter 9 of +2-Part-1 - USHA Publication 12 Class Part - 1

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 12 % 2/12 = Rs. 450[ August September ]

(ii) 10,000 12 % 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.

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

Leave a Reply

Your email address will not be published. Required fields are marked *