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Accountancy Test 2

This document contains an 18 question multiple choice and journal entry accounting test on the topic of debentures. The questions cover topics such as types of debentures, journal entries for issuing debentures at par, premium and discount, treatment of discount/loss on issue, and collateral security debentures. The test contains questions ranging from 1 to 5 marks testing various journal entry recording and debenture issuance accounting treatments.

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legendsabari2004
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48 views3 pages

Accountancy Test 2

This document contains an 18 question multiple choice and journal entry accounting test on the topic of debentures. The questions cover topics such as types of debentures, journal entries for issuing debentures at par, premium and discount, treatment of discount/loss on issue, and collateral security debentures. The test contains questions ranging from 1 to 5 marks testing various journal entry recording and debenture issuance accounting treatments.

Uploaded by

legendsabari2004
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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CLASS - XII 11:11 ACADEMY

ACCOUNTANCY TEST - 2 DATE:

Select the correct answer for the following multiple choice questions:
1. Debentures which are transferable by mere delivery are:
(a) Registered debentures,

(b) First debentures,

(c) Bearer debentures.

(1 Mark)
2. 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

Debentures have been issued at a discount of:

(a)15%
(b)5%
(c) 10%
(1 Mark)

3. X Co. Ltd. purchased assets worth Rs. 28,80,000. It issued debentures of Rs. 100 each at a
discount of 4 per cent in full satisfaction of the purchase consideration. The number of
debentures issued to vendor is:
(a) 30,000,
(b) 28,800,
(c) 32,000
(1 Mark)

4. When debentures are issued at par and are redeemable at a premium, the loss on such an
issues debited to :
(a) Statement of profit and loss,
(b) Debentures applications and allotment account
(c) Loss on issue of debentures account
(1 Mark)

5. Excess value of net assets over purchase consideration at the time of purchase of business is
credited to :
(a) General reserve,
(b) Capital reserve,
(c) Vendors’ account.
(1 Mark)
CLASS - XII 11:11 ACADEMY

6. Journalise the following:


(i) A debenture issued at Rs. 95, repayable at Rs. 100;
(ii) A debenture issued at Rs. 95, repayable at Rs. 105; and
(iii) A debenture issued at Rs. 100, repayable at Rs. 105;
The face value of debenture in each of the above cases is Rs. 100
(3 Marks)
7. X. Ltd. purchased a Machinery from Y. Ltd. at an agreed purchase consideration of Rs. 4,40,000
to be satisfied by the issue of 12% debentures of Rs. 100 each at a premium of Rs. 10 per
debenture. Journalise the transactions
(3 Marks)
8. Rohit Ltd. has issued 50,000, 8% debentures of Rs. 100 each at a discount of 9% on July 1,
2019. The company has balance of Rs. 5,00,000 in securities premium reserve. Pass
necessary journal entries for issue of debentures and to write-off discount/Loss on issue of
debentures. The debentures are redeemable after 5 years at a premium of 7%
(3 Marks)
9. X Ltd. issued 2,000, 10% debentures of Rs. 100 each at a discount of 8% on April 01, 2019
which are redeemable. It has balance in Securities Premium Reserve of Rs. 30, 000. Calculate
the amount to be written-off from securities Premium Reserve
(2 Marks)
10. A. Ltd. issued 4,000, 9% debentures of Rs. 100 each on the following terms:
Rs. 20 on Application;
Rs. 20 on Allotment;
Rs. 30 on First call; and
Rs. 30 on Final call.
The public applied for 4,800 debentures. Applications for 3,600 debentures were accepted in
full. Applications for 800 Debentures were allotted 400 debentures and applications for 400
Debentures were rejected. All money called and duly received. Record necessary journal
entries.
(4 Marks)
11. National Packaging Company purchased assets of the value of Rs. 1,90,000 from another
company and agreed to make the payment of purchase consideration by issuing 2,000, 10%
debentures of Rs. 100 each at a discount of 5%. Record necessary journal entries.
(4 Marks)
12. Suvidha Ltd. purchased machinery worth Rs.1,98,000 from Suppliers Ltd. The payment was
made by issue of 12% debentures of Rs.100 each. Pass the necessary journal entries for the
purchase of machinery and issue of debentures when:
(i) Debentures are issued at par;
(ii) Debentures are issued at 10% discount; and
(iii) Debentures are issued at 10% premium
(4 Marks)
13. A company took a loan of Rs. 10,00,000 from Punjab National Bank and issued 10%
debentures of Rs. 12,00,000 of Rs. 100 each as a collateral security. Explain how you will deal
with the issue of debentures in the books of the company.
(4 Marks)
14. You are required to pass the journal entries relating to the issue of the debentures in the
books of X Ltd., under the following cases:
(a) 120, 8% debentures of Rs. 1,000 each are issued at 5% discount and repayable at par.
Balance in Securities Premium Reserve is Rs. 10,000.
CLASS - XII 11:11 ACADEMY

(b) 150, 7% debentures of Rs. 1,000 each are issued at 5% discount and repayable at
premium of 10%. Balance in Securities Premium Reserve is Rs. 20,000.

(c) 80, 9% debentures of Rs. 1,000 each are issued at 5% premium.

(d) Another 400, 8% debentures of Rs. 100 each are issued as collateral security against a
loan of Rs. 40,000.

(4 Marks)

15. A listed company issues the following debentures:


(i) 10,000, 12% debentures of Rs. 100 each at par but redeemable at premium of 5%
after 5 years;
(ii) 10,000, 12% debentures of Rs. 100 each at a discount of 10% but redeemable at par
after 5 years;
(iii) 5,000, 12% debentures of Rs. 1000 each at a premium of 5% but redeemable at par
after 5 years;

(iv) 1,000, 12% debentures of Rs. 100 each issued to a supplier of machinery costing Rs.
95,000. The debentures are repayable after 5 years; and

(iv) 300, 12% debentures of Rs. 100 each as a collateral security to a bank which has
advanced a loan of Rs. 25,000 to the company for a period of 5 years

Pass the journal entries for issue of debentures.

(5 Marks)
16. B. Ltd. purchased assets of the book value of Rs. 4,00,000 and took over the liability of Rs.
50,000 from Mohan Bros. It was agreed that the purchase consideration, settled at Rs.
3,80,000, be paid by issuing debentures of Rs. 100 each.

What Journal entries will be made in the following three cases, if debentures are issued: (a)
at par; (b) at 10% discount; (c) at premium of 10%? It was agreed that any fraction of
debentures be paid in cash. (Note: Goodwill Rs. 30,000)

(5 Marks)

17. X. Ltd. issued 15,000, 10% debentures of Rs. 100 each. Give journal entries and present it in
the balance sheet in each of the following cases:
(i) The debentures are issued at a premium of 10%;
(ii) The debentures are issued at a discount of 5%;
(iii) The debentures are issued as a collateral security to bank against a loan of Rs.
12,00,000; and
(iv) The debentures are issued to a supplier of machinery costing Rs. 13,50,000.
(5 Marks)
18. A. Ltd. issued 50,00,000, 8% debentures of Rs. 100 at a discount of 6% on April 01, 2018,
redeemable at premium of 4% by draw of lots as under:
20,00,000 debentures on March, 2020
10,00,000 debentures on March, 2021
20,00,000 debentures on March, 2022
Record journal entries for issue of debuntures. Prepare discount/loss on issue of debenture
account.
(5 Marks)

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