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CUET Accountancy 2023 PYQs28 May Shift 1. Free, no login required.

Company Accounts

past year questions, CUET Accountancy 2023 28 May Shift 1

Debentures

past year questions, Company Accounts, CUET Accountancy 2023 28 May Shift 1

Easy

XYZ Ltd. has been operating in the field of FMCG products in South Indian market. However to expand its operation in northern part of India, it needs additional capital Rs. 20,00,000 which is raised by issuing 10% Debenture of Rs. 12,00,000 of Rs. 100 issued at a discount of 10% to be repayable after 6 years. The rest of the funds is raised by issuing 5% debenture of Rs. 8,00,000 of Rs. 100 issued at 15% premium. These debentures are perpetual in nature. After six years of successful operation in northern India, company took a loan of Rs. 5,00,000 from PNB against 5% debenture of Rs. 8,00,000 of Rs. 100 each as a collateral security. The company successfully ran its operation and managed to pay off its loan within two years.

Company raised a loan of Rs. 5,00,000 from PNB against 5% debenture of Rs. 8,00,000 of Rs. 100 each as a collateral security. The "Debenture suspense A/c" will be debited with :

Solution

✅ Correct Option: 3

When debentures are issued as collateral security using the Debenture Suspense Account method, the entry is:

Debenture Suspense A/c Dr. 8,00,000

To Debentures A/c 8,00,000.

Thus the Debenture Suspense A/c is debited with the face value of debentures issued, i.e., 8,00,000.

More from this set:

Question 46

XYZ Ltd. issues 10% debentures of Rs. 12,00,000 of Rs. 100 each at a discount of 10% which will be repayable after 6 years. What type of debenture it is ?

Question 47

XYZ Ltd. issued another category of debenture which are perpetual in nature. What type of debentures they are called :

Question 48

While issuing 10% debenture of Rs. 12,00,000 at 10% discount. What amount should be transferred to "Discount on issue of debenture A/c" if all amount is received in one instalment ?

Question 49

If 5% debenture of Rs. 8,00,000 of Rs. 100 were issued at 15% premium. Amount is payable as Rs. 25 on applications, Rs. 50 on allotment and Rs. 40 on 1st and final call. How much amount should be credited to "Security Premium Reserve A/c".

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