CBSE Class 12 Accountancy HOTs Accounting for Debentures

Please refer to CBSE Class 12 Accountancy HOTs Accounting for Debentures. Download HOTS questions and answers for Class 12 Accountancy. Read CBSE Class 12 Accountancy HOTs for Part 1 Chapter 1 Accounting For Debentures below and download in pdf. High Order Thinking Skills questions come in exams for Accountancy in Class 12 and if prepared properly can help you to score more marks. You can refer to more chapter wise Class 12 Accountancy HOTS Questions with solutions and also get latest topic wise important study material as per NCERT book for Class 12 Accountancy and all other subjects for free on Studiestoday designed as per latest CBSE, NCERT and KVS syllabus and pattern for Class 12

Part 1 Chapter 1 Accounting For Debentures Class 12 Accountancy HOTS

Class 12 Accountancy students should refer to the following high order thinking skills questions with answers for Part 1 Chapter 1 Accounting For Debentures in Class 12. These HOTS questions with answers for Class 12 Accountancy will come in exams and help you to score good marks

HOTS Questions Part 1 Chapter 1 Accounting For Debentures Class 12 Accountancy with Answers

UNIT 5: ACCOUNTING FOR DEBENTURES

LEARNING OBJECTIVES

I) Understand the meaning and features of debentures.

II) Differentiate between shares and debentures.

III) Understand different classes of debentures

IV) Journal entries regarding issue of debentures for cash and for consideration other than cash.

V) Accounting treatment of debentures issued as collateral security

VI) Accounting treatment of issue and redemption of debentures at par, discount and at premium.

VII) Understand the methods of redemption of debentures.

VIII) Accounting treatment of redemption of debentures out of capital and profit.

IX) Understand the redemption of debentures by purchase in the open market

X) Understand redemption of debentures by conversion into shares and new debentures.

1) What do you meant by Debentures?

Debentures is an instrument of debt owned by a company as an acknowledgement of debt, such measurements are issued under the seal of company and duly signed by authorized signatory.

2) Write any four types of debentures

i) Redeemable debentures

ii) Perpetual Debentures

iii) Convertible debentures

i) Secured debentures

3) What is debenture Trust Deed?

Debenture trust deed is a document created by the company whereby trustee is appointed to protect the interest of debenture holders before they are offered for public subscription.

4) What is meant by convertible debentures?

Convertible debentures are those, the holders of which are given an option to exchanging the amount of their debentures with equity shares or other securities after a specified period.

5) Why is premium on the issue of debentures considered as a capital profit?

Premium on the issue of debentures is considered a capital profit because it is not an income arising from the normal course of business operations.

 

6) Explain deep discount Bond

 

When debentures are issued without interest rate and issue price is thereby discounted, the issue of debenture is said to have been made as deep discount bond.
 
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8) What is the nature of interest on debentures?
 
Ans.Interest on debentures is a charge against profits.
 
9) State in brief, the SEBI Guidelines regarding Debenture Redemption Reserve
 
Ans. At per SEBI Guidelines, an amount equal to 50% of the debenture issue must be transferred to DRR before the redemption begins. In other words, before redemption, at least an amount equal to 50% of the debenture issue must stand to the credit of DRR
 
10) Name the head under which discount on issue of debentures appears in the Balance Sheet of "C" Company.
 
Ans. Discount on issue of debentures will appear under the heading Miscellaneous Expenditure.
 
11) What are the exceptions for creating debenture Redemption Reserve?
 
Ans.(i) An infrastructure company, (ii) Debentures are issued for less than 18 months maturity period (iii) if debentures issued by private placement.
 
12) What do you mean by debentures issued as collateral security?
 
Ans.The issue of debentures as a collateral security means the issue of debentures as an additional security against the loan in addition to principal security that may be offered.
 
13) A Ltd issued 5,000 13% debentures of Rs.100 each at par and raised a loan of Rs.80, 000 from Bank. Collaterally secured by Rs. 100,000 13% debentures. How will
You show the debenture in the Balance Sheet of the Company assuming that the company has recorded the issue of Debentures as collateral security in the books.

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15) Ashoka Ltd. had Rs. 5, 00,000 12% debentures outstanding as on 1st Jan, 2003. During the year company took a loan of Rs. 3, 00,000 from Bank of Punjab for which the company placed with the bank debentures of Rs. 3, 60,000 as collateral security.

 

Pass journal entries and also show how the debentures and bank loan will appear in the balance sheet.

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16) XYZ Co. Ltd., issued 10000 10% debentures of Rs.100 each at a premium of Rs. 5 payable as follows

 

On application Rs.40, on Allotment Rs.65 (including premium)

 

All the debentures were subscribed and money was received, pass necessary journal entries to record the issue of debentures

 

Journal Entries

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Part 1 Chapter 01 Accounting For Debentures Assignment
CBSE Class 12 Accountancy HOTs Accounting for Debentures
Part 1 Chapter 02 Accounting for Partnership Basic Concepts
CBSE Class 12 Accountancy HOTs Partnership Basic Concepts
Part 1 Chapter 03 Reconstitution of a Partnership Firm Admission of a Partner
CBSE Class 12 Accountancy HOTs Admission Of A Partner
Part 1 Chapter 04 Reconstitution of a Partnership Firm Retirement/Death of a Partner
CBSE Class 12 Accountancy HOTs Death Retirement Of A Partner
Part 1 Chapter 05 Dissolution of Partnership Firm
CBSE Class 12 Accountancy HOTs Dissolution of A partnership firm
Part 1 Chapter Accounting for Not-for-Profit Organisation
CBSE Class 12 Accountancy HOTs Accounting for Not-for- Profit Organisation
Part 2 Chapter 01 Accounting for Share Capital
CBSE Class 12 Accountancy HOTs Accounting For Share Capital
Part 2 Chapter 02 Issue and Redemption of Debentures
CBSE Class 12 Accountancy HOTs Issue And Redemption of Debentures
Part 2 Chapter 03 Financial Statements of a Company
CBSE Class 12 Accountancy HOTs Financial Statements of a Company
Part 2 Chapter 04 Analysis of Financial Statements
CBSE Class 12 Accountancy HOTs Analysis of Financial Statement
Part 2 Chapter 05 Accounting Ratios
CBSE Class 12 Accountancy HOTs Accounting Ratios
Part 2 Chapter 06 Cash Flow Statement
CBSE Class 12 Accountancy HOTs Cash Flow Statement

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