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On 1st April 2019 a… (Class 12 Accountancy SQP 2024-25, Q7)

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AccountancyCBSE Class 12 · Sample paper, session 2024-25 · 1 mark · MCQ

CBSE Class 12 Accountancy sample paper 2024-25: question 7

From the official CBSE sample question paper for 2024-25, section A, question 7, for 1 mark. Try it first; the hints and our step-by-step solution are below.

Q7 · 1 mark · MCQCompetency-basedIssue and Redemption of Debentures

On 1st April 2019 a company took a loan of ₹80,00,000 on security of land and building. This loan was further secured by issue of 40,000, 12% Debentures of ₹100 each as collateral security. On 31st March 2024 the company defaulted on repayment of the principal amount of this loan consequently on 1st April 2024 the land and building were taken over and sold by the bank for ₹70,00,000. For the balance amount debentures were sold in the market on 1st May 2024. From which date would the interest on debentures become payable by the company?

  1. (A)1st April 2019.
  2. (B)31st March 2024.
  3. (C)1st April 2024.
  4. (D)1st May 2024.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2024-25.

Hints

Open one hint at a time and try again before the next.

Hint 1

Is interest paid on debentures held only as collateral?

Hint 2

When do the debentures pass into the hands of real holders?

Step-by-step solution

Each step shows the marks it earns, as an examiner would award them. Checked by an independent re-solve from the question paper.

  1. Debentures issued as collateral security carry no interest while they are only a security.

  2. Interest becomes payable when the bank sells them to outsiders, on 1st May, 2024. Option (D).

    1 mark

Answer: (D) 1st May 2024.

Where the marks are

  • Interest runs from the date collateral debentures are actually sold (1 mark)

Revise the chapter

Practise this chapterBoard-style questions from Issue and Redemption of Debentures, one at a time, marked against the answer key and marking points.Back to the full paperSample paper 2024-25: every question, by section.

The question is transcribed from the official paper; figures are described in words. The solution, hints and chapter tag are ours. Spotted an error? Write tosupport@questionbuddy.in.