Tag: company accounts part - 2 (accounting for debentures)

Questions Related to company accounts part - 2 (accounting for debentures)

T Ltd. purchased land and building from U Ltd. for a book value of Rs. $3,00,000$. The consideration was paid by issue of $12\%$ Debentures of Rs. $100$ each at a discount of $20\%$. The debentures account is credited with.

book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

  1. Rs. $3,00,000$

  2. Rs. $3,75,000$

  3. Rs. $3,60,000$

  4. Rs. $2,40,000$

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Correct Option: B

G Ltd purchased land and building from H Ltd. at a book value of Rs. 2,00,000. The consideration was paid by issue of 12% debentures of Rs. 100 each at a discount of 20%. For this transaction, the debentures account would be credited with -

book keeping and accountancy company accounts part - 2 (accounting for debentures) discount/loss on issue of debenture written off issue of debentures procedure for issue of debentures

  1. Rs. 2,60,000

  2. Rs. 2,50,00

  3. Rs. 2,40,00

  4. Rs. 1,60,000

Show answer
Correct Option: B
Explanation:

Debentures issued at discount of 20%. 
 Number of Debentures issued = 2,00,000/80
                                                     = 2500
Face Value of Debentures = Rs. 100
Debentures account would be credited with 2500*100 = Rs. 2,50,000