Question

Riya Limited issued 20,000 14% Debentures of the nominal value of Rs.1,00,00,000 as

follows:

To sundry persons for cash at 90% of nominal value of Rs. 50,00,000.

To a vendor for purchase of fixed assets worth Rs. 20,00,000 – Rs. 25,00,000 nominal

value.

To the banker as collateral security for a loan of Rs. 20,00,000 – Rs. 25,00,000 nominal

value.

You are required to prepare necessary journal entries Journal Entries.​

Answer 1

Answer:

200000 is the answer

Explanation:

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Answer 2

Given:

No. of Debentures issued - 20,000

Nominal Value - Rs. 1,00,00,000

Sundry Persons at 90% cash - Rs. 50,00,000

Bank collateral security for the loan of Rs. 20,00,000 - Rs. 25,00,000

Vendor for purchase of fixed assets of Rs. 20,00,000 - Rs. 25,00,000

To find:

Journal entrances for the above transactions.

Solution:

No. of debentures issued - 20,000

Nominal Value - Rs. 1,00,00,000

$Value \: of \: each \: debentures = \frac{10000000}{20000}$

$Value \: of \: each \: debentures = 500$

Sundry Persons at 90% cash - Rs. 50,00,000

$No. \: of \: debentures \: for \: sundry \: persons \\ = \frac{5000000}{500}$

$No. \: of \: debentures \: for \: sundry \: persons = 10000$

Vendor for purchase of fixed assets of Rs. 20,00,000 - Rs. 25,00,000

$No. \: of \: debentures \: issued \: to \: vendors = \frac{2500000}{500}$

$No. \: of \: debentures \: issued \: to \: vendors = 5000$

Bank collateral security for the loan of Rs. 20,00,000 - Rs. 25,00,000

$No. \: of \: debentures \: issued \: as \: bank \: collateral \\ = \frac{2500000}{500}$

$No. \: of \: debentures\: issued \: as \: bank \: collateral = 5000$

Journal Entries are as follows:

Sundry Persons A/c Dr 5000000

Bank Collateral A/c Dr 2500000

Vendors A/c Dr 2500000

To 14% debentures A/c. Cr. 10000000

(Being 14% debentures at Rs. 500 each issued for payment of sundry persons, bank collateral and the purchase of fixed assets)