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On January 01… (Class 12 Accountancy SQP 2025-26, Q19)

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AccountancyCBSE Class 12 · Sample paper, session 2025-26 · 3 marks · Short answer

CBSE Class 12 Accountancy sample paper 2025-26: question 19

From the official CBSE sample question paper for 2025-26, section A, question 19, for 3 marks. Try it first; the hints and our step-by-step solution are below.

Q19 · 3 marks · Short answerIssue and Redemption of Debentures

On January 01, 2025 Ritu Ltd. Issued ₹ 40,00,000, 8% Debentures of ₹ 100 each at 5% discount to be redeemed at 10% premium at the end of 5 years. Balance in Securities Premium on the date of such issue was of ₹ 2,70,000. Pass entries for Issue of debentures.

Source: official sample paper from cbseacademic.nic.in (PDF). See it in the full Sample paper 2025-26.

Hints

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

Hint 1

How many debentures are issued, and at what price?

Hint 2

Loss on issue = discount allowed + premium payable on redemption.

Hint 3

The Securities Premium balance matters only when the loss is written off, which is not asked here.

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. Number of debentures = ₹ 40,00,000 / ₹ 100 = 40,000. Issue price = ₹ 95, so cash received = ₹ 38,00,000. Loss on issue = discount ₹ 2,00,000 + premium on redemption 10% ₹ 4,00,000 = ₹ 6,00,000.

  2. Receipt of money

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.38,00,000
    To Debentures Application and Allotment A/c38,00,000
    (Being application and allotment money received, 1st January, 2025)
    1 mark

  3. Allotment

    ParticularsDr. (₹)Cr. (₹)
    Debentures Application and Allotment A/c Dr.38,00,000
    Loss on Issue of Debentures A/c Dr.6,00,000
    To 8% Debentures A/c40,00,000
    To Premium on Redemption of Debentures A/c4,00,000
    (Being 40,000 8% debentures of ₹ 100 each issued at 5% discount, redeemable at 10% premium)
    2 marks

Answer: Bank Dr. ₹ 38,00,000 to Debentures Application and Allotment; then Debentures Application and Allotment Dr. ₹ 38,00,000 and Loss on Issue Dr. ₹ 6,00,000 to 8% Debentures ₹ 40,00,000 and Premium on Redemption ₹ 4,00,000

Where the marks are

  • Entry for money received (1 mark)
  • Allotment entry with loss on issue ₹ 6,00,000 and premium on redemption ₹ 4,00,000 (2 marks)

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 2025-26: 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.