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

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

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

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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 : –

Journal
Date  Particulars
L.F.Debit ₹Credit ₹
 Bank A/cDr. 6,30,000 
 To 10 % Mortgage Debenture A/c   6,00,000
 To Secruity Premium A/c   30,000
 (Being Issue of 7,500 10 % mortgage debentures of ₹ 100 each at premium of 5 % )   
     

 

Balance Sheet of Sudha Ltd.
Liabilities side
Reserve Surplus 
Premium on Debentures 30,000
Secured Loans  
10 % mortgage Debentures (secured on the fixed assets of the company)6,00,000
Bank Loan (secured by issues of ₹ 60,000, 10% mortgage debentures by way of collateral security)60,000

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 :

Journal
DateParticulars
L.F.Debit ₹Credit ₹
 Debenture Suspense A/cDr. 1,50,000 
 To 10 % Mortgage Debenture A/c  1,50,000

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

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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

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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