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 | ||