Page 221 - ISCDEBK-12

Joint Stock Company—Issue of Debentures 8.15

BALANCE SHEET OF EEY KAY LTD.
as at ...
Particulars Note No. `
I. EQUITY AND LIABILITIES
1. Shareholders’ Funds
Reserves and Surplus 1 (50,000)
2. Non-Current Liabilities
Long-term Borrowings 2 20,50,000
Total 20,00,000
II. ASSETS
1. Non-Current Assets
Fixed Assets—Tangible 3 11,00,000
2. Current Assets
Cash and Bank Balances 4 9,00,000
Total 20,00,000

Notes to Accounts
1. Reserves and Surplus `
Securities Premium Reserve 1,00,000
Less: Loss on Issue of Debentures 1,00,000 ...
Surplus, i.e., Balance in Statement of Profit and Loss:
Opening Balance ...
Less: Loss on Issue of Debentures 50,000 (50,000)
(50,000)
2. Long-term Borrowings
10,000; 12% Debentures of ` 100 each 10,00,000
10,000; 10% Debentures of ` 100 each 10,00,000
(Above 10% Debentures issued to Vendors of machinery pursuant to contract for
consideration other than Cash)
Premium Payable on Redemption of Debentures 50,000
20,50,000
3. Fixed Assets—Tangible
Plant and Machinery 11,00,000
4. Cash and Bank Balances
Cash at Bank 9,00,000
Illustration 13.
Gee Ess Ltd. is registered with authorised capital of 2,00,000 shares of ` 10 each and issued, subscribed
and fully paid-up capital of ` 15,00,000. It purchased computers of ` 7,50,000 and office furniture of
` 2,50,000 and issued 10% Debentures of ` 100 each at 10% discount to the Vendors, redeemable at par.
The company also issued 10,000, 8% Debentures of ` 100 each at a premium of 10% redeemable at 10%
premium. The amount was payable along with application.
The applications were received for 12,500 debentures and allotment was made on pro rata basis to all the
applicants. Both the allotments were made on 1st April, 2014.
You are required to:
(i) Pass Journal entries for issue of debentures;
(ii) Pass Journal entries for interest for the year ended 31st March, 2015 and
(iii) Prepare Balance Sheet showing the above transactions.
Note: According to the terms of issue, interest is payable on half-yearly basis.