Company Accounts

Debentures

Medium

common

Manubhai Patel Company Limited purchased assets of the book value of Rs. 12,00,000 from another company and agreed to make the payment of purchase consideration by issuing 10% debentures of Rs. 100 each at 150% premium. Find the number of debentures issued?

8,000 Debentures

10,909 Debentures

4,800 Debentures

12,000 Debentures

✅ Correct Option: 3

Premium is $150\%$ of $100 = 150$ , so issue price $= 100 + 150 = 250$ per debenture. Number of debentures $= 12,00,000 / 250 = 4,800$ .

2026: 20 May Shift 1

Which of the following is a written instrument acknowledging a debt under the common seal of the company?

2026: 11 May Shift 1

The following journal entry appears in the books of XYZ Co. Ltd.

Particulars		Dr. (Rs.)	Cr. (Rs.)
Bank A/c	Dr.	4,80,000
Loss on issue of debentures A/c	Dr.	1,50,000
To 12% Debentures A/c			6,00,000
To Premium on Redemption of Debenture A/c			30,000

Calculate the rate at which debentures have been issued at a discount.

2025: 24 May Shift 1

Match List-I with List-II

List-I	List-II
Type of Debenture	Meaning
(A) Redeemable Debenture	(I) Payable on the expiry of the specific period either in lump sum or in installments during the lifetime of the company.
(B) Perpetual Debenture	(II) Company does not give any undertaking for the repayment of money borrowed by issuing such debentures.
(C) Specific Coupon Rate Debenture	(III) Issued with a specified rate of interest, which is called the coupon rate.
(D) Bearer Debenture	(IV) Can be transferred by way of delivery and the company does not keep any record of the debenture.

Choose the correct answer from the options given below:

2023: 29 May Shift 2

On 1st July/22, Centaur Ltd. issued Rs. 25,00,000 8% debentures of Rs. 100 each as collateral security to first Level Bank against loan dues of Rs. 20,00,000. How much amount will be shown in the Balance sheet?

2025: 15 May Shift 1

The following journal entry appears in the books of X Co. Ltd.

Bank A/c Dr. 4,75,000

Loss on issue of debenture A/c Dr. 75,000

To 12% Debentures A/c 5,00,000

To Premium on Redemption of Debenture A/c 50,000

In this case the debentures have been issued at a discount of 5% . What is the rate of premium on redemption of debentures?

2025: 14 May Shift 1

Match List-I with List-II

List-I	List-II
(A) Secured Debentures	(I) Which are payable on the expiry of the specific period either in lump sum or in instalments during the life time of the company.
(B) Unsecured Debentures	(II) Debentures where a charge is created on the assets of the company for the purpose of payment in case of default.
(C) Redeemable Debentures	(III) These debentures are repayable on the winding-up of a company or on the expiry of a long period.
(D) Irredeemable Debentures	(IV) Debentures do not have a specific charge on the assets of the company.

Choose the correct answer from the options given below:

Manubhai Patel Company Limited purchased assets of the book value of Rs. 12,00,000 from another company and agreed to make the payment of purchase consideration by issuing 10% debentures of Rs. 100 each at 150% premium. Find the number of debentures issued?

Solution

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