Gaurav Ltd issued 600, 8% debentures of Rs. 100 each as collateral security against a Bank loan of Rs. 50,000. Journal Entry for issue of debentures as collateral security will be: Option 1: Date Particulars L.F. Dr. Amount Cr. Amount Debenture Suspense A/c Dr. 60,000 To Bank A/c 60,000 Option 2: Date Particulars L.F. Dr. Amount Cr. Amount 8% Debenture A/c Dr. 60,000 To 8% Debentures Suspense A/c 60,000 Option 3: Date Particulars L.F. Dr. Amount Cr. Amount Bank A/c Dr. 60,000 To Bank Loan A/c 60,000 Option 4: Date Particulars L.F. Dr. Amount Cr. Amount Debenture Suspense A/c Dr. 60,000 To 8% Debentures A/c 60,000

Answer: Date Particulars L.F. Dr. Amount Cr. Amount Debenture Suspense A/c Dr. 60,000 To 8% Debentures A/c 60,000. Solution: Under the second method of recording, the nominal value of 600 x 100 = 60,000 is entered by debiting Debentures Suspense Account and crediting 8% Debentures Account. Both appear in the balance sheet and cancel out when the loan is repaid.

Company Accounts

Debentures

Easy

common

Gaurav Ltd issued 600, 8% debentures of Rs. 100 each as collateral security against a Bank loan of Rs. 50,000. Journal Entry for issue of debentures as collateral security will be:

Date Particulars L.F. Dr. Amount Cr. Amount

Debenture Suspense A/c Dr. 60,000

To Bank A/c 60,000

Date Particulars L.F. Dr. Amount Cr. Amount

8% Debenture A/c Dr. 60,000

To 8% Debentures Suspense A/c 60,000

Date Particulars L.F. Dr. Amount Cr. Amount

Bank A/c Dr. 60,000

To Bank Loan A/c 60,000

Date Particulars L.F. Dr. Amount Cr. Amount

Debenture Suspense A/c Dr. 60,000

To 8% Debentures A/c 60,000

✅ Correct Option: 4

Under the second method of recording, the nominal value of $600 \times 100 = 60{,}000$ is entered by debiting Debentures Suspense Account and crediting 8% Debentures Account. Both appear in the balance sheet and cancel out when the loan is repaid.

2025: 3 June Shift 2

The following are the features of Debenture:

(A) Debentures can be converted into shares if the terms of issue are so provided, and in that case these are known as convertible debentures.

(B) Debentures are generally secured and carry a fixed or floating charge over the assets of the company.

(D) The debentures are issued for a specified period and repayable on the expiry of that period.

Choose the correct answer from the options given below:

2025: 4 June Shift 2

The following are the features of Debentures:

(A) The payment of interest is a charge on profits and is to be paid even if there is no profit.

(B) The debentures, which are issued for a specified period are repayable on the expiry of that period.

(D) Debentures can not be converted into shares in any case.

Choose the correct answer from the options given below:

2026: 11 May Shift 2

Debenture Application & Allotment A/c Dr. 210,000

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

To 9% Debenture A/c 2,00,000

To Premium on Redemption of Debentures A/c 10,000

To Securities Premium Reserve A/c 10,000

(Debenture application money transferred to debentures account)

Accountant has passed the above journal entry. Identify the correct situation of terms and conditions of issue and redemption of debentures,

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?

2023: 11 June Shift 3

How much amount is to be debited in statement of profit and Loss to write off loss on Issue of Debentures ?

2025: 16 May Shift 1

From the point of view of Tenure, debentures can be of following types:

(A) Reedemable Debentures

(B) Non-Convertible Debentures

(D) Registered Debentures

Choose the correct answer from the options given below:

Gaurav Ltd issued 600, 8% debentures of Rs. 100 each as collateral security against a Bank loan of Rs. 50,000. Journal Entry for issue of debentures as collateral security will be:

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