1. Debenture is a document given by a company as evidence of a debt to the holder usually arising out of a loan and most commonly secured by a charge. Debenture Certificate Debentures Issue of Debentures

2. Debentures Issue of Debentures

3. Secured Unsecured Redeemable Irredeemable Registered Bearer Specific Coupon Rate Zero Coupon Rate Zero Coupon Rate Convertible Non Convertible Debentures Types of Debentures

4. Debentures Issue of Debentures

5. Debentures Issue of Debentures

6. DateParticulars `` Sundry Assets A/c …Dr. To Vendors (Being the purchase of sundry assets) Vendors A/c …Dr. To Debenture A/c (Being the issue of debenture at par) Vendors A/c …Dr. To Debenture A/c To Securities Premium (Being the issue of debenture at premium) Debentures Issue of Debentures

7. Debentures Issue of Debentures

8. DateParticulars `` Sundry Assets A/c …Dr. To Vendors To Sundry Liabilities A/c (Being sundry assets acquired and liabilities taken over a purchase consideration) With the value of asset With the purchase consideration With the value of liability Journal Entries

9. DateParticulars `` Sundry Assets A/c …Dr. Goodwill A/c …Dr. To Vendors To Sundry Liabilities A/c (Being the taking over of assets and liabilities and payment of purchase consideration) With the value of asset With the excess purchase consideration With the purchase consideration With the value of liabilities Journal Entries Debentures Issue of Debentures

10. DateParticulars `` Sundry Assets A/c …Dr. To Capital Reserve To Vendors To Sundry Liabilities A/c (Being the taking over of assets and liabilities and payment of purchase consideration) With the value of asset With the excess purchase consideration With the purchase consideration With the value of liabilities Journal Entries Debentures Issue of Debentures

11. Debentures as Collateral Security Debentures Issue of Debentures

12. Debenture Suspense A/c …Dr. To Debenture A/c (Being the issue of debenture as collateral security issued) Balance Sheet Liabilities Secured Loans Bank Loan (Secured by issue of ` 5,000, 10% debentures as collateral security) Issue of debenture as collateral security recorded No entry is recorded at the time of issuing such debentures. Debentures Issue of Debentures

13. ABC Ltd. secured a loan of ` 80,000 from Punjab National Bank issuing 1,000, 10% Debentures of 100 each as collateral security. Show the treatment for the issue of debentures. Debentures Issue of Debentures

14. Balance Sheet of ABC Ltd Particulars ` ` Secured Loans Loan from PNB (Secured by issue of ` 1,000, 10% Debentures of 100 each as collateral security) 80,000 Debentures Issue of Debentures

15. Balance Sheet of ABC Ltd Particulars ` ` Secured Loans 1,000, 9% Debenture Loan from PNB (Secured by issue of ` 1,000, 10% Debentures of 100 each as collateral security) 1,00,000 80,000 Miscellaneous Expenditure Debenture Suspense A/c 1,00,000 Particulars `` Debenture Suspense A/c …Dr. To 10% Debenture A/c (Being the issue of 1,000, 10% Debenture of 100 each as collateral security for a loan from bank.) 1,00,000 - 1,00,000 Journal Debentures Issue of Debentures

16. Redemption of Debentures means repayment of the amount of debentures to the debenture holders or discharge of the liability on account of the debenture. Raise Fresh Capital Utilise the profit Sale of Assets Surplus Funds Debentures Redemption of Debentures

17. Debentures Issue of Debentures

18. Under this method all debenture are redeem at the end of a specified period i.e. on maturity at par or at a premium. Debentures Methods of Redemption of Debentures

19. Debenture A/c …Dr. (with nominal account) To Debenture Holders A/c On Redemption On Debentures becoming due for payment Debenture Holders A/c …Dr. (with nominal account) To Bank A/c Debentures Methods of Redemption of Debentures

20. Debenture A/c …Dr. (with nominal account) Premium on redemption of debenture …Dr. (with premium payable) To Debenture Holders A/c On Redemption On Debentures becoming due for payment Debenture Holders A/c …Dr. (with the amount paid) To Bank A/c Debentures Methods of Redemption of Debentures

21. Under this method debenture may be purchased by the company either for immediate cancellation or keeping them as investment and cancel at a later date. Debentures Methods of Redemption of Debentures

22. Own Debenture A/c …Dr. (Cost of own debentures) To Bank A/c On cancellation of own debentures On purchase of Debentures Debenture A/c …Dr. (with nominal account) To Own Debenture A/c (with purchase price) To Profit on cancellation of own debentures ( Excess of face value) Profit transferred to Capital Reserve Profit on cancellation of own debentures…Dr. To Capital Reserve A/c Debentures Methods of Redemption of Debentures

23. Investment in Own Debenture A/c …Dr. To Bank A/c On cancellation of own debentures On purchase of Debentures Debenture A/c …Dr. (with nominal account) To Investment in Own Debenture A/c ( with Cost) To Profit on cancellation of own debentures ( with profit) Profit transferred to Capital Reserve Profit on cancellation of own debentures…Dr. To Capital Reserve A/c Debentures Methods of Redemption of Debentures

24. Debenture A/c …Dr. To Debenture holders A/c Discharge obligation by issue of Shares & Debentures Amount due to Debentures holders Debenture A/c …Dr. Premium on Redemption A/c …Dr. To Debenture holders A/c Debenture holders A/c …Dr. To Share/Debenture A/c Debenture holders A/c …Dr. To Share/Debenture A/c To Securities Premium A/c Debenture holders A/c …Dr. Discount on issue of share A/c …Dr. To Share/Debenture A/c Debentures Methods of Redemption of Debentures