Company Accounts

Debentures

Easy

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%

Number of debentures issued are :

2,500

2,800

3,000

3,150

✅ Correct Option: 3

Given:

Purchase consideration = Rs 3,15,000
Debentures of Rs 100 each issued at 5% premium

When debentures are issued at a premium, the issue price per debenture increases.

Face value of each debenture = Rs 100

Premium = 5% of Rs 100 = Rs 5

Issue price per debenture = Rs 100 + Rs 5 = Rs 105

To find the number of debentures issued:

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

Number of debentures = $\frac{3,15,000}{105}$

Number of debentures = 3,000

The information about assets worth Rs 3,00,000 and liabilities of Rs 20,000 is provided to show how the purchase consideration of Rs 3,15,000 was arrived at (Net assets taken over: 3,00,000 - 20,000 = 2,80,000, plus some goodwill). However, for calculating the number of debentures, only the total purchase consideration and issue price matter.

2026: 29 May Shift 1

X Ltd. purchased an asset of book value of Rs. 4,00,000 and took over the liability of Rs. 50,000 from Y Ltd. It was agreed that the purchase consideration, settled at Rs. 3,80,000, will be paid by issuing debentures of Rs. 100 each at a discount of 10 % . How many debentures will be issued by X Ltd. to Y Ltd.?

2026: 13 May Shift 2

When debentures are issued at discount and redeemable at a premium, ___________ account will be _________ for combined capital loss of issue and redemption of debentures.

2025: 26 May Shift 2

When debentures are issued at par and are redeemable at a premium, the loss on such issue is debited to :

2025: 2 June Shift 2

Choose the correct statement:-

2026: 21 May Shift 1

"If the company fails to repay the loan along with interest, the lender is free to receive his money from the sale of the primary security and if the realisable value of the primary security falls short to cover the entire amount, the lender has the right to invoke the benefit of additional security whereby debentures may either be presented for redemption or sold in the open market".

Identify the type of issue of debentures stated in the above statement.

2025: 27 May Shift 1

X Limited Issued 10,000, 12% debentures of Rs. 100 each payable Rs. 40 on application and Rs. 60 on allotment. The public applied for 14,000 debentures. Applications for 9,000 debentures were accepted in full, applications for 2,000 debentures were allotted 1,000 debentures and the remaining applications, were rejected. All money was duly received. 12% Debenture Application A/c will be credited with -

Number of debentures issued are :

Solution

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