Question 30 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 30 Chapter 9 of +2-Part-1 – USHA 

30. (Debentures Issued as Collateral Security/Balance Sheet) Sudha Ltd., being in need of further capital made an issue of 7,500 10% Mortgage Debentures of Rs. 100 each secured on the fixed assets of the company. Of these, 6,000 Debentures were issued to the public at a premium of 5%, while the remaining 1,500 Debentures were issued to the company’s bankers by way of collateral security against a loan of Rs. 60,000.
Show how these transactions will be recorded in the Company’s Books and how they will appear in the Balance Sheet.

The solution of Question 30 Chapter 9 of +2 Part-1 – USHA : –

Note: No entry is required to be made in the books of the company in respect of issue of debentures as collateral Secruity . Only a note in this respect is given on the balance sheet under the loan thus secured . If, however ,it is desired to record such transactions in the book of the company , the following entry will be made :

Debentures Suspense A/c will be shown on the assets side of the balance sheet or on liability side by wy of deduction from Debentures A/c

It all about Question 30 Chapter 9 of +2-Part-1 – USHA, If you have any problem please comment below.

Issue of Debentures from the point of view of Redemption

End of Solution

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