Company Accounts

Debentures

Medium

Comprehension:

Answer the next 5 questions from the passage-

XYZ Ltd. purchased assets worth Rs 3,00,000 from Blue Prints Ltd., and took overs its liabilities of Rs 20,000 for a purchase consideration of Rs 3,15,000. XYZ Ltd., paid the purchase consideration by issuing 12% debentures of Rs 100 each at a premium of 5%

Which situation is not true about Issue of Debentures-

Issued at par and redeemable at par

Issued at a premium and redeemable at par

Issued at par and redeemable at a premium

Issued at a discount and redeemable at a discount

✅ Correct Option: 4

The question asks which situation is NOT possible for issue of debentures.

Concept:

Debentures can be issued:

At par, premium or discount

Redeemed at par or premium

However:

Issue at discount and redemption at discount is NOT allowed

Because:

Companies Act does not permit redemption at discount

Redemption must be at par or premium only

2026: 23 May Shift 2

Which of the following is not correct with regard to debentures:

2026: 29 May Shift 2

__________ debentures refer to those debentures where a charge is created on the assets of the company for the purpose of payment in case of default.

2026: 24 May Shift 1

Depending upon the terms and conditions of issue and redemption of debentures, which of the following situation is not found in practice?

2025: 15 May Shift 2

Convertible debentures cannot be issued at a discount if:

2025: 30 May Shift 1

Suvidha Ltd. purchased machinery worth Rs.1,98,000 from Suppliers Ltd. The payment was made by issue of 12% debentures of Rs.100 each. How many debentures will be issued at a 10% discount?

2026: 20 May Shift 1

H Ltd. purchased machinery worth Rs.99,000 from P Ltd. The payment was made by issue of 12% debentures of Rs.100 each. Pass the necessary journal entries for the issue of debentures when debentures are issued at 10% discount in the books of H Ltd.

Which situation is not true about Issue of Debentures-

Solution

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