Read the following case study and answer question. Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by the firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of ₹ 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of ₹ 45,00,000. At the time of issue of Debenture they also issued equity Share of ₹ 30,00,000 at 20% premium.
What will be the amount of premium on Redemption of Debentures.
₹12,50,000
Premium = 12.5% of ₹1,00,00,000 = ₹12,50,000.
Important Questions from Accounting for Debentures
When debentures are issued at a premium and redeemed at a premium, the journal entry will have the following combination:
(A) Discount on issue of debentures account is credited
(B) Loss on issue of debentures account is debited
(C) Security premium account is credited
(D) Premium on redemption of debentures account is credited
Choose the correct answer from the options given below:
Arrange the following in the correct sequence in the context of debenture:
(A) Payment to debenture-holders
(B) Creation of DRR
(C) Issue of debentures
(D) Redemption becomes due
Choose the correct answer from the options given below:
Balance of Debenture Redemption Reserve A/c after the redemption of debenture is credited to:
Calculate the number of Debentures issued by A Ltd. for consideration other than cash:
‘Discount on issue of debenture’, which is to be written off under one operating cycle is shown under:
