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Model Test Papers M.391

6. Securities Premium Reserve Account is not debited with the amount relating to forfeited
shares because Securities Premium once received cannot be applied for purposes other
than those specified in Section 52(2) of the Companies Act, 2013.
7. AN EXTRACT OF BALANCE SHEET
as at 31st March, 2018
Liabilities ` Assets `
Capital Fund Building in Progress 3,60,000
Opening Balance 10,80,000 10% Building Fund Investments 4,80,000
Add: Transfer from Building Fund 3,60,000 14,40,000
Building Fund
Opening Balance 4,80,000
Add: Donation Received 6,00,000
Interest Received on Building Fund
Investments 48,000
11,28,000
Less: Transfer to Capital Fund 3,60,000 7,68,000

8. JOURNAL OF X LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank A/c ...Dr. 10,00,000
To Debentures Application and Allotment A/c 10,00,000
(Being the receipt of debentures application money for 10,000;
10% Debentures @ ` 100 each)
Debentures Application and Allotment A/c ...Dr. 10,00,000
To 10% Debentures A/c 10,00,000
(Being the issue of 10,000; 10% Debentures of ` 100 each at par)
(ii) Bank A/c ...Dr. 10,00,000
To Debentures Application and Allotment A/c 10,00,000
(Being the receipt of debentures application money for 10,000;
10% Debentures @ ` 100 each)
Debentures Application and Allotment A/c ...Dr. 10,00,000
Loss on Issue of Debentures A/c ...Dr. 1,00,000
To 10% Debentures A/c 10,00,000
To Premium on Redemption of Debentures A/c 1,00,000
(Being the issue of 10,000; 10% Debentures of ` 100 each at par
but redeemable at 10% premium)
(iii) Machinery A/c ...Dr. 12,00,000
To Vendor’s A/c 12,00,000
(Being the purchase of Machinery)
Vendor’s A/c ...Dr. 12,00,000
To 10% Debentures A/c 10,00,000
To Securities Premium Reserve A/c 2,00,000
(Being the issue of 10,000; 10% Debentures of ` 100 each at a premium of 20%)