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Model Test Papers M.13
10. The total amount of Discount on Issue of Debentures comes to ` 36,000 (i.e., 6% of ` 6,00,000).
Since the debentures are redeemed at different dates, the total amount of discount is to
be written off in the proportion to the amount outstanding against debentures.
Calculation of Amount of Discount on Issue of Debentures to be Written off
At the end of Debentures Ratio Discount to be
Outstanding (`) Written off
2014–15 6,00,000 3 ` 36,000 × 3/9 = ` 12,000
2015–16 6,00,000 3 ` 36,000 × 3/9 = ` 12,000
2016–17 4,00,000 2 ` 36,000 × 2/9 = ` 8,000
2017–18 2,00,000 1 ` 36,000 × 1/9 = ` 4,000
Total 9 ` 36,000
In the Books of X Ltd.
Dr. DISCOUNT ON ISSUE OF DEBENTURES ACCOUNT Cr.
Date Particulars ` Date Particulars `
2014 2015
April 1 To 10% Debentures A/c 36,000 Mar. 31 By Statement of Profit and Loss 12,000
Mar. 31 By Balance c/d 24,000
36,000 36,000
2015 2016
April 1 To Balance b/d 24,000 Mar. 31 By Statement of Profit and Loss 12,000
Mar. 31 By Balance c/d 12,000
24,000 24,000
2016 2017
April 1 To Balance b/d 12,000 Mar. 31 By Statement of Profit and Loss 8,000
Mar. 31 By Balance c/d 4,000
12,000 12,000
2017 2018
April 1 To Balance b/d 4,000 Mar. 31 By Statement of Profit and Loss 4,000
4,000 4,000
11. ADJUSTMENT ENTRY
Date Particulars L.F. Dr. (`) Cr. (`)
Kumar’s Current A/c ...Dr. 11,100
To Raja’s Current A/c 11,100
(Being the interest on capital and salary of partners adjusted)
ADJUSTMENT TABLE
Particulars Kumar’s Current A/c Raja’s Current A/c Firm
Dr. (`) Cr. (`) Dr. (`) Cr. (`) Dr. (`) Cr. (`)
I. Amount of Profit already credited, now taken back 1,94,600 ... 83,400 ... ... 2,78,000
II. Amount which should have been credited:
(i) Interest on Capital ... 81,000 ... 36,000 1,17,000 ...
(ii) Salary ... 50,000 ... 36,000 86,000 ...
(iii) Share of Profit (` 75,000 in ratio of 7 : 3) ... 52,500 ... 22,500 75,000 ...
1,94,600 1,83,500 83,400 94,500 2,78,000 2,78,000
III. Net Effect (I – II) 11,100 (Dr.) 11,100 (Cr.) ...