Issue and redemption of debentures Question Bank
[BCOM 2nd Sem CBCS Pattern 2023]
In this post you will get Issue and redemption of debentures Question Bank for BCOM 2nd SEM CBCS Pattern. In this Question Bank we will cover Questions asked in the following universities exam:
– Dibrugarh UniversityÂ
– Gauhati University
– Assam University
1. (2018)X Co. Ltd. Issued 500, 6% Debentures of Rs. 100 each on 1st April, 2014. Repayable at a premium of 5% at the end of 3 years. In order to ensure repayment, a sinking fund was created at 5% per annum compound interest. Investment realized Rs. 33,000 on 31st March, 2017 and the debentures were paid-off on that date. Sinking fund table shows that Rs. 0.317208 amounts to Rs. 1 in 3 years at 5% compound interest. Pass the necessary Journal Entries in the books of the company. Â Â Â Â Â Â Â Â Â Â
2. (2018 old course) On 1st April, 2017, the following balances appeared in the books of J. K. Company Ltd.:
|
|
Rs. |
|
12% Debentures Sinking Fund Sinking Fund Investment |
20,00,000 16,00,000 16,00,000 |
The investment consisted of 8% Government Securities of the face value of Rs. 17,00,000. The annual investment to sinking fund was Rs. 2,64,000. The bank balance on 31st March, 2018 was Rs. 5,60,000 (after receipt of interest on sinking fund investment). Investments realized 93% and debentures were redeemed. Show all necessary Ledger Accounts.
3. (2017) Journalize the following transactions at the time of issue of redemption of debentures in the books of the Company:Â Â Â Â 3+4+4=11
a) Issued Rs. 90,000, 13% debentures at 10% discount, redeemable at par.
b) Issued Rs. 90,000, 13% debentures at par, redeemable at 10% premium.
c) Issued Rs. 90,000, 13% debentures at 5% premium, redeemable at 10% premium.
4. (2016)XYZ Co. Ltd. issued 500, 6% debentures of Rs. 100 each on 1st January, 2012, repayable at a premium of 5% at the end of 3 years. In order to ensure repayment, a sinking fund was created at 5% p.a. at compound interest. Investment realized Rs. 33,000 on 31st December, 2014 and the debentures were paid of on that date. Sinking Fund Table shows that Rs. 0.317208 amounts to Rs. 1 in 3 years at 5% compound interest. Pass the necessary Journal Entries.
5. (2015) Jokai Tea Ltd. issues 1000, 10% convertible debentures of Rs. 100 each. Give Journal Entries in each of the following cases:
1) The debentures are issued at par and redeemable at par.
2) The debentures are issued at 5% premium and redeemable at 10% premium.
3) The debentures are issued at 5% discount and redeemable at 5% premium.
6. (2015 old course) On 1st January, 2010 Ashok Co. Ltd. Issued 1000, 6% debentures of Rs. 100 each, repayable at par at the end of 4 years. It was decided to create a sinking fund for repayment of the debentures and invest the amount of fund in 6% Government Securities. Show the Ledger A/c for 4 years assuming that the investments were realized for Rs. 70,000 only and the debentures were paid-off at the end of the period. Annual installment to provide Rs. 1 at the end of 4 years at 6% compound interest is Rs. 0.228591.            Â
7. (2013) A limited company issued 6% 10000 debentures of Rs. 100 each at discount of 5 per cent, repayable after 5 years at a premium of 10 per cent. Show journal Entries in the books of the company recording the above transactions.
8. (2012)ABC Ltd issued Rs. 10,00,000 debentures on Jan 1, 2009. These were to be redeemed on 31st Dec, 2011. For this purpose, the company established a sinking fund. Investments were expected to earn 5% interest p.a. Sinking Fund Table show that 0.317208 invested actually at 5% interest amounts to 1 in three years. On 31st Dec 2011 the bank balance was 420000 before receipt of interest on sinking fund investments. On that date the investments were sold for 656000. Calculate the interest to the nearest of a rupee assuming investments are made in multiples of Rs. 100. Show the debenture account, Sinking Fund Account and sinking fund investments account in the book of the company.
9. (2011)A company issued 5000 debentures of Rs 100 each at par on 1st January, 2003 redeemable at par on 31st December, 2007. A sinking fund was established for the purpose. It was expected that investments would earn 5% net. Sinking fund tables’ show that Re 0.180975 invested at the end of each year will amount to Re 1 at the end of 5 years @ 5%. On 31st December, 2007 the investment realized Rs 3, 90,000. On that date company’s Bank balance stood at Rs 1, 45,600. The debentures were duly redeemed. Give Journal Entries, Ledger Accounts and assume that the investments were made to the nearest Rs 10.
10. (2005) Brahmaputra Company Ltd. Issues 1500, 8% convertible debentures of Rs. 100 each. Give journal entries in each of the following case:
a) The debentures are issued at a discount of 5% and redeemable at a discount of 2 ½.
b) The debentures are issued at a premium of 5% and redeemable at a premium of 10%.
11. (2007) Greenhouse Tea Ltd. Issued 1000, 10% convertible debentures of Rs. 100 each Give Journal Entries in the each of the following cases:
1. The debentures are issued at par and redeemable at par.
2. The debentures are issued at par and redeemable at a discount of 5%.
3. The debentures are issued at a discount of Rs. 7% and are redeemable at a discount 3 ½ %.
4. The debentures are issued at a premium of Rs. 10% but are redeemable at a discount of 5%.
5. The debentures are issued at a premium of Rs. 5% but are redeemable at a premium of 10%.
12. (2008) The debentures Redemption Fund Account of a Ltd Company stood at Rs. 160000 represented by stood at Rs. 200000 (nominal) investment. The debenture stood at Rs. 500000 and the Company sold Rs. 24000 investments at Rs. 85 for the purpose of redeeming Rs. 20000 debentures at Rs. 20000 debentures at 102. Show ledger accounts ignoring interest etc.
13. (2008 Major) On 1st April 2006 the following balance appeared in the book of Ram Company Ltd.
12% debenture                2000000
Debentures sinking fund            1600000
Debentures sinking fund investment          1600000
The investment consisted of 8% Govt. Securities of the face value of Rs. 1700000
The annual investment to sinking fund was Rs.264000
The bank balance of the March 31st 2007 was Rs. 560000 (after receipt of interest on sinking fund investment). Investment realized 93% and debenture were redeemed.
14. (2019) Gayetree Tea Ltd. issues 5,000, 8% convertible debentures of Rs. 100 each. Give the Journal Entries relating to issue in each of the following cases:
a) The debentures are issued at par and redeemable at par.
b) The debentures are issued at 5% premium and redeemable at 10% premium.
c) The debentures are issued at 5% discount and redeemable at 5% premium.
PRACTICAL QUESTION BANK (FROM 2012 TO 2022)
ISSUE OF SHARES, RIGHT SHARES AND BONUS SHARES
REDEMPTION OF PREFERECE SHARES
ISSUE AND REDEMPTION OF DEBENTURES
AMALGAMATION AND EXTERNAL RECONSTRUCTION
Important Theory Questions for 2023 BCOM Exams available here.