Please answer 7 ques all the parts have confusion in every part
Dear Student
Please note that balance sheet hasnt been prepared for each transaction as the treatment can be understood by the above table.
Regards
Journal in the books of the company | ||||
Date | Particulars | Debit | Credit | |
a | Bank A/c | Dr. | 30,000 | |
To Debenture Application A/c | 30,000 | |||
(Being application money received on 300 debentures ) | ||||
Debenture Application A/c | Dr. | 30,000 | ||
To 9% Debenture A/c | 30,000 | |||
(Being Application money transferred to 9% Debenture A/c to be redeemed at par) | ||||
b | Bank A/c | Dr. | 32,100 | |
To Debenture Application A/c | 32,100 | |||
(Being application money received on 300 debentures ) | ||||
Debenture Application A/c | Dr. | 32,100 | ||
To 9% Debenture A/c (300 x 100) | 30,000 | |||
To Securities Premium A/c (300 x 7) | 2,100 | |||
(Being Debentures issued at 7% premium to be redeemed at par) | ||||
c | Bank A/c | Dr. | 27,000 | |
To Debenture Application A/c | 27,000 | |||
(Being application money received on 300 debentures ) | ||||
Debenture Application A/c | Dr. | 27,000 | ||
Discount on issue of Debentures A/c (300 x 10) | 3,000 | |||
To 9% Debenture A/c (300 x 100) | 30,000 | |||
(Being Debentures issued at 10% discount to be redeemed at par) | ||||
d | Bank A/c | Dr. | 32,100 | |
To Debenture Application A/c | 32,100 | |||
(Being application money received on 300 debentures ) | ||||
Debenture Application A/c | Dr. | 32,100 | ||
Loss on Issue of Debentures A/c (300 x 4) | Dr. | 1,200 | ||
To 9% Debenture A/c (300 x 100) | 30,000 | |||
To Securities Premium A/c (300 x 7) | 2,100 | |||
To Premium on Redemption of Debentures A/c (300 x 4) | 1,200 | |||
(Being Debentures issued at 7% premium to be redeemed at 4% Premium) | ||||
e | Bank A/c (250 x 90) | Dr. | 22,500 | |
To Debenture Application A/c | 22,500 | |||
(Being application money received on 250 debentures ) | ||||
Debenture Application A/c | Dr. | 22,500 | ||
Loss on Issue of Debenture A/c (250 x 10) + (250 x 4) | Dr. | 3,500 | ||
To 9% Debenture A/c (250 x 100) | 25,000 | |||
To Premium on Redemption of Debentures A/c (250 x 4) | 1,000 | |||
(Being Debentures issued at 10% discount to be redeemed at 4% Premium) |
Treatment in the balance sheet | |||||
Transaction number | Amount to be shown in Long Term Borrowings as Debentures | Amount to be shown as Securities Premium in Reserve and Surplus Section of Balance sheet | Amount to be shown as Premium on Redemption of Debentures in Other long term Liabilities | Amount to be shown as Loss on Issue of Debentures in Other Non Current Assets | Amount to be shown as Cash and Equivalents |
a | 30,000 | - | - | - | 30,000 |
b | 30,000 | 2,100 | - | - | 32,100 |
c | 30,000 | - | - | 3,000 | 27,000 |
d | 30,000 | 2,100 | 1,200 | 1,200 | 32,100 |
e | 25,000 | - | 1,000 | 3,500 | 22,500 |
Please note that balance sheet hasnt been prepared for each transaction as the treatment can be understood by the above table.
Regards