Check sibling questions

Youth Ltd. took a loan of ₹ 15,00,000 from State Bank of India against the security of tangible assets. In addition to principal security, it issued 10,000 11% debentures of ₹ 100 each as collateral security. Pass necessary journal entries for the above transactions, if the company decided to record the issue of 11% debentures as collateral security and show the presentation in the Balance Sheet of Youth Ltd.

Answer

Date Particulars L.F Dr (Amount) Cr (Amount)
(i) Bank  A/c   Dr   1500000  
  To Bank Loan     1500000
  (Loan taken from State Bank of India)      
         
(ii) Debenture Suspense A/c  Dr   1000000  
           To 11% Debentures A/c     1000000
  (Issue of 10000, 11% debentures of Rs 100 each as a collateral security for a loan)      

 

                An extract of Balance Sheet of Youth ltd.
Particulars Note No. Amt
1. EQUITIES AND LIABILITIES    
Non - Current Liabilities    
Long term Borrowings 1 1000000

 

NOTES TO ACCOUNTS :

Particulars Amount
1. LONG TERM BORROWINGS
       Loan from State Bank of India   1500000
       10000, 11% Debentures of Rs. 100 each issued as          1000000  
       Collateral Security    
       Less : Debenture Suspense A/c                                      1000000 0
    1500000

 

 

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Transcript

Youth Ltd. took a loan of ₹ 15,00,000 from State Bank of India against the security of tangible assets. In addition to principal security, it issued 10,000 11% debentures of ₹ 100 each as collateral security. Pass necessary journal entries for the above transactions, if the company decided to record the issue of 11% debentures as collateral security and show the presentation in the Balance Sheet of Youth Ltd. Answer Date Particulars L.F Dr (Amount) Cr (Amount) (i) Bank A/c Dr 1500000 To Bank Loan 1500000 (Loan taken from State Bank of India) (ii) Debenture Suspense A/c Dr 1000000 To 11% Debentures A/c 1000000 (Issue of 10000, 11% debentures of Rs 100 each as a collateral security for a loan) An extract of Balance Sheet of Youth ltd. Particulars Note No. Amt 1. EQUITIES AND LIABILITIES Non - Current Liabilities Long term Borrowings 1 1000000 NOTES TO ACCOUNTS : Particulars Amt 1. LONG TERM BORROWINGS Loan from State Bank of India 1500000 10000, 11% Debentures of Rs. 100 each issued as 1000000 Collateral Security Less : Debenture Suspense A/c 1000000 0 1500000

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Davneet Singh is a graduate from Indian Institute of Technology, Kanpur. He has been teaching from the past 12 years. He provides courses for Maths and Science at Teachoo.