Company Accounts

Debentures

Easy

X Co. Ltd. purchased assets worth Rs. 28,80,000. It issued debentures of Rs. 100 each at a discount of 4 % in full satisfaction of the purchase consideration. The number of debentures issued to vendors is:

30,000

28,800

32,000

28,000

✅ Correct Option: 1

Given Information:

Purchase consideration for assets = Rs. 28,80,000
Face value of each debenture = Rs. 100
Debentures issued at 4% discount

Finding the Issue Price per Debenture:

When debentures are issued at 4% discount:

Discount per debenture = 4% of Rs. 100 = Rs. 4

Issue price per debenture = Face value - Discount

Issue price per debenture = Rs. 100 - Rs. 4 = Rs. 96

Calculating Number of Debentures:

Since debentures are issued in full satisfaction of purchase consideration, the total amount received from issuing debentures equals the purchase consideration.

Number of debentures = $\frac{\text{Purchase Consideration}}{\text{Issue Price per Debenture}}$

Number of debentures = $\frac{28,80,000}{96}$ = 30,000 debentures

Verification:

30,000 debentures × Rs. 96 = Rs. 28,80,000 ✓

The vendors receive 30,000 debentures of Rs. 100 each (face value = Rs. 30,00,000) but the issue value is only Rs. 28,80,000, which exactly satisfies the purchase consideration.

Answer: Option 1: 30,000

2026: 20 May Shift 1

A Limited issued 5000, 10% debentures of Rs. 100 each, at a premium of Rs. 10 per debenture payable as follows:

On application Rs. 25, On allotment Rs. 45 (including premium), On first and final call Rs. 40.

The debentures were fully subscribed and all money was duly received.

Select the correct journal entries related to the above case from the following.

(A)

Particulars	Dr. Amount	Cr. Amount
10% Debenture Allotment A/c Dr.	2,25,000
To 10% Debentures A/c		1,75,000
To Securities Premium Reserve A/c		50,000

(B)

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Bank A/c Dr.		1,25,000
	To 10% Debenture Application A/c			1,25,000

(C)

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Bank A/c Dr.		2,00,000
	To 10% Debenture First & Final Call A/c			2,00,000

(D)

Date	Particulars	L.F.	Dr. Amount	Cr. Amount
	Bank A/c Dr.		2,20,000
	To 10% Debenture Allotment A/c			2,20,000

Choose the correct answer from the options given below:

2026: 21 May Shift 1

Most companies raise long-term funds through debentures. Identify incorrect statements regarding debentures.

(A) Debenture holders enjoy voting rights.

(B) A company may issue different kinds of debentures, like Secured Debentures, Unsecured Debentures, Redeemable Debentures, Irredeemable Debentures, Convertible Debentures, Non-convertible Debentures.

(D) The return on Debenture is known as dividend.

Choose the correct answer from the options given below:

2023: 11 June Shift 3

What will be the amount of premium on Redemption of Debentures.

2025: 4 June Shift 2

Match List-I with List-II

List-I	List-II
(Type of Debentures)	(Characteristic of Debenture)
(A) Secured Debentures	(I) do not have a specific charge on assets of the company
(B) Redeemable Debentures	(II) do not carry a specific rate of interest
(C) Zero Coupon Rate Debentures	(III) are payable on the expiry of the specific period
(D) Unsecured Debentures	(IV) a charge is created on the assets of the company

Choose the correct answer from the options given below:

2025: 3 June Shift 1

Which among the following debentures are the debentures which can be transferred by way of delivery and the company does not keep any record of the debentures. Interest on the debentures is paid to a person who produces this interest coupon attached to such debentures?

2026: 6 June Shift 1

Varun Ltd., purchased building worth Rs.1,50,000, machinery worth Rs.1,40,000 and furniture worth Rs.10,000 from Anuj Ltd., and took over its liabilities of Rs. 20,000 for a purchase consideration of Rs. 3,15,000. Varun Ltd., paid the purchase consideration by issuing 12% debentures of Rs.100 each at a premium of 5%. What will be the amount of goodwill in this case?

X Co. Ltd. purchased assets worth Rs. 28,80,000. It issued debentures of Rs. 100 each at a discount of 4 % in full satisfaction of the purchase consideration. The number of debentures issued to vendors is:

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