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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/c | Dr. | 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 | |||||
Date | Particulars | L.F. | Debit ₹ | Credit ₹ | |
Debenture Suspense A/c | Dr. | 1,50,000 | |||
To 10 % Mortgage Debenture A/c | 1,50,000 |
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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
You can also Check out the solved question of other Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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How 75000 in balance sheet in que 30 of ch 9 plz reply
Sorry, typing mistake.
The bank loan amount is Rs 60,000/-
Thanks for your feedback.