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 

Free Accounting book Solution - Class 11 and Class 12

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

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

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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