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On 1st April, 2024… (Class 12 Accountancy 2026, Q21)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/1/1 · 4 marks · Long answer

CBSE Class 12 Accountancy 2026: question 21

Set in the CBSE Class 12 board exam of 2026, paper 67/1/1, section A, question 21, for 4 marks. Try it first; the hints and our step-by-step solution are below.

Q21 · 4 marks · Long answerIssue and Redemption of Debentures

On 1st April, 2024 Bhumika Ltd. issued 500, 9% debentures of ₹ 500 each at a discount of 10% redeemable at a premium of 6% after five years. On 31st March, 2025 the company had a balance of ₹ 30,000 in its Securities Premium Account.

Pass necessary journal entries for issue of 9% Debentures and writing off Loss on issue of Debentures. Also prepare 'Loss on Issue of Debentures Account'.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/1/1.

Hints

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

Hint 1

Debentures of ₹ 500 at 10% discount bring ₹ 450 each.

Hint 2

Loss on issue = discount + premium on redemption.

Hint 3

Use Securities Premium before the Statement of Profit and Loss.

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. Face value = 500 × ₹ 500 = ₹ 2,50,000; issue price ₹ 450, cash ₹ 2,25,000. Loss on issue = discount ₹ 25,000 + premium on redemption 6% ₹ 15,000 = ₹ 40,000.

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.2,25,000
    To Debenture Application and Allotment A/c2,25,000
    (Being application money received, 1st April, 2024)
    1 mark
  2. ParticularsDr. (₹)Cr. (₹)
    Debenture Application and Allotment A/c Dr.2,25,000
    Loss on Issue of Debentures A/c Dr.40,000
    To 9% Debentures A/c2,50,000
    To Premium on Redemption of Debentures A/c15,000
    (Being debentures allotted at 10% discount, redeemable at 6% premium)
    1 mark

  3. Write off on 31st March, 2025: Securities Premium first (₹ 30,000), balance ₹ 10,000 from the Statement of Profit and Loss.

    ParticularsDr. (₹)Cr. (₹)
    Securities Premium A/c Dr.30,000
    Statement of Profit and Loss Dr.10,000
    To Loss on Issue of Debentures A/c40,000
    (Being loss on issue written off)
    1 mark

  4. Loss on Issue of Debentures Account

    Particulars₹Particulars₹
    01.04.2024 To 9% Debentures A/c25,00031.03.2025 By Securities Premium A/c30,000
    01.04.2024 To Premium on Redemption of Debentures A/c15,00031.03.2025 By Statement of Profit and Loss10,000
    40,00040,000
    1 mark

Answer: Bank ₹ 2,25,000; Loss on issue ₹ 40,000 (discount ₹ 25,000 + premium ₹ 15,000); written off Securities Premium ₹ 30,000 and Statement of P&L ₹ 10,000

Where the marks are

  • Receipt entry (1 mark)
  • Allotment with loss on issue (1 mark)
  • Write-off entry (1 mark)
  • Loss on Issue of Debentures Account (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 paper2026 board paper, set 67/1/1: 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.