Question

X.Ltd. purchased a Machinery from Y for 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.

Answer 1

Given : X.Ltd. purchased a Machinery from Y for 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.  

 

Concept :  

DEBENTURE :  

• Debenture is a written acknowledgement of debt taken by the company.
• Debentures can be issued with /without charge on the assets.
• Debentures may be issued at par, at premium or at discount.  
• Journal entries on issue of debenture are also the same as in case of issue of shares.  The difference is that instead of 'Share capital A/c , a debenture A/c'  is opened in the books of accounts and the rate of interest on debenture is prefixed on the issue of debentures.
• Debentures can be converted into equity shares.
• The debentures can be redeemed in lump sum or in installments.
• Debentures are shown under the head Non current liabilities and subhead long term borrowings.  

 For a record of the above the journal entries are in the attachment below :  

 

Hope this answer will help you..

Some more questions of this chapter :  

G.Ltd. issued 75,00,000, 6% Debenture of Rs 50 each at par payable Rs 15 on application and Rs 35 on allotment, redeemable at par after 7 years from the date of issue of debenture. Record necessary entries in the books of Company.

https://brainly.in/question/17093306

 

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.

https://brainly.in/question/17093305

Answer 2

Answer: purchases A/C

 to machinery A/

Explanation: