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CUET Accountancy 2025 PYQs2 June Shift 2. Free, no login required.

Company Accounts

past year questions, CUET Accountancy 2025 2 June Shift 2

Debentures

past year questions, Company Accounts, CUET Accountancy 2025 2 June Shift 2

Medium

common

Debenture suspense is shown in the balance sheet as

Solution

✅ Correct Option: 1

Debenture Suspense Account arises when debentures are redeemed by the company but the debentureholders have not yet surrendered their debenture certificates. Since the company has already paid for the redemption, it cannot continue to show the full debenture liability.

The accounting treatment involves:

  • Transferring the redeemed amount from Debentures Account to Debenture Suspense Account
  • This suspense account represents a temporary holding until certificates are received

In the Balance Sheet, Debenture Suspense Account appears as a deduction from the Debentures under Non-Current Liabilities.

Presentation format:

Non-Current Liabilities:

  • Debentures: ₹10,00,000
  • Less: Debenture Suspense: ₹2,00,000
  • Net Debentures: ₹8,00,000

This presentation is logical because the suspense amount is not an actual liability anymore (company has already paid), but the formality of certificate surrender is pending. It reduces the gross debenture amount to show the actual outstanding liability.

The suspense account will be closed once the debentureholders surrender their certificates, completing the redemption process formally.

Related questions:

2022: 30 Aug Shift 2

Match List I with List II

LIST I: Basis of DebentureLIST II: Types of Debenture
A.TenureI.Zero coupon rate
B.Interest rate point of viewII.Irredemable
C.SecurityIII.Registration
D.BearerIV.Secured

Choose the correct answer from the options given below:

2024

When debentures are issued at premium and redeemed at premium, the journal entry will have the following combination:

2022: 15 July Shift 2

From Coupon Rate Point of view, Debentures are classified into:

2026: 11 May Shift 2

The number of debentures to be issued to the vendor against purchase of machinery, will be calculated as follows:

2025: 31 May Shift 1

Which of the following is true about debentures-

(A) Debenture is a part of owned capital.

(B) The payment of interest on debentures is a charge on the profits of the company.

(C) The debentures cannot be issued at a discount of more than 10% of the face value.

(D) Redeemable debentures are those debentures which are payable on the expiry of the specific period.

Choose the correct answer from the options given below:

2025: 15 May Shift 1

Debenture Application & Allotment A/c Dr. 95,000

Loss on Issue of Debentures A/c Dr. 10,000

To 9% Debenture A/c 1,00,000

To Premium on Redemption of Debentures A/c 5,000

On the basis of the above entry, determine the rate of discount at which Rs. 1,00,000, 9% debentures of Rs. 100 each were issued if they were to be redeemed at a premium of 5%.

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