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Accounting for Debentures Test - 10

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Accounting for Debentures Test - 10
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  • Question 1
    1 / -0

    ABC Ltd issued 5000 10% Debentures of ₹100 each payable as ₹40 on application and ₹60 on allotment. Applications were received for 6000 debentures. Applicants for 500 debentures were sent letter of regret and money was returned. Allotment was made proportionately to the remaining applicants. Over subscription was applied to the amount due on allotment. All money was duly received. Calculate amount to be returned to the applicants

    Solution

    Amount to be returned to the applicants Rs.20,000 i.e.
    No. of Debenture issued 5,000
    Applications Rejected 500
    Amount received on excess 500 applications = 500 x 40 = 20,000 which is to be returned now.

     

  • Question 2
    1 / -0

    ABC Ltd issued 5000 10% Debentures of ₹100 each payable as ₹40 on application and ₹60 on allotment. Applications were received for 6000 debentures. Applicants for 500 debentures were sent letter of regret and money was returned. Allotment was made proportionately to the remaining applicants. Over subscription was applied to the amount due on allotment. All money was duly received. By what amount Debentures Allotment A/c be credited while passing entry for allotment money received

    Solution

    Allotment will be credited with ₹3,00,000 i.e.
    Allotment due ₹3,00,000
    Already adjusted excess = 20,000
    Allotment Received = 3,00,000 – 20,000 = 2,80,000

     

  • Question 3
    1 / -0

    A company has issued 5000 10% Debentures of ₹100 each at a premium of 20% payable as ₹60 on application ₹60 on allotment (including premium) All the debentures were subscribed for and money was duly received. Calculate securities premium amount.

    Solution

    Amount of Securities premium ₹1,00,000 to be credited at the time of allotment. i.e. 5,000 × 20 = 1,00,000

     

  • Question 4
    1 / -0

    A company has issued 2000 9% debentures of ₹100 each at a discount of 10% payable as ₹40 on application ₹50 on allotment. Calculate amount of debenture discount

    Solution

    Amount of Discount to be debited ₹20,000
    i.e. 2,000 × 10 = 20,000

     

  • Question 5
    1 / -0

    Vinod Electronics Ltd. purchased machinery for ₹198000 and issued 9% debentures of ₹100 each to the vendors. Make journal entries if the debentures were issued at a premium of ₹10.Vendor’s account should be debited by…….

    Solution

    Vendor’s Account should be debited with Rs.1,98,000 because the total amount due to him is Rs.1,98,000.

     

  • Question 6
    1 / -0

    Debenture Application Account is:

    Solution

    Debenture Application Account is a personal account. It is Representative Personal Account.

     

  • Question 7
    1 / -0

    Debenture Allotment Account is:

    Solution

    Debenture Allotment Account is a personal account. It is Representative Personal Account.

     

  • Question 8
    1 / -0

    Premium on Redemption of Debentures Account is:

    Solution

    Premium on Redemption of Debentures Account is a personal account. It is shown in the balance sheet (as premium due). Premium payable on redemption is treated as a loss and should be written off against the Statement of P/L.

     

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