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Pass necessary journal… (Class 12 Accountancy 2026, Q21)

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AccountancyCBSE Class 12 · Board exam 2026, set 67/5/1 · 4 marks · Long answer

CBSE Class 12 Accountancy 2026: question 21

Set in the CBSE Class 12 board exam of 2026, paper 67/5/1, 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

Pass necessary journal entries for the issue of debentures for the following transactions :
(i) XS Ltd. issued 40,000, 9% Debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%.
(ii) YG Ltd. issued 50,000, 9% Debentures of ₹ 100 each at par, redeemable at a premium of 10%.

Source: official question paper from cbse.gov.in (PDF). See it in the full 2026 board paper, set 67/5/1.

Hints

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

Hint 1

Premium on issue goes to Securities Premium; premium on redemption is a liability.

Hint 2

Loss on issue = premium payable on redemption (plus any discount).

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. (i) XS Ltd. Issue price ₹ 110: cash ₹ 44,00,000; premium on issue ₹ 4,00,000; premium on redemption 5% = ₹ 2,00,000 (a loss on issue).

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.44,00,000
    To Debenture Application and Allotment A/c44,00,000
    (Being application money received on 40,000 debentures)
    1 mark
  2. ParticularsDr. (₹)Cr. (₹)
    Debenture Application and Allotment A/c Dr.44,00,000
    Loss on Issue of Debentures A/c Dr.2,00,000
    To 9% Debentures A/c40,00,000
    To Securities Premium A/c4,00,000
    To Premium on Redemption of Debentures A/c2,00,000
    (Being debentures issued at 10% premium, redeemable at 5% premium)
    1 mark

  3. (ii) YG Ltd. Issued at par for ₹ 50,00,000; premium on redemption 10% = ₹ 5,00,000.

    ParticularsDr. (₹)Cr. (₹)
    Bank A/c Dr.50,00,000
    To Debenture Application and Allotment A/c50,00,000
    (Being application money received on 50,000 debentures)
    1 mark
  4. ParticularsDr. (₹)Cr. (₹)
    Debenture Application and Allotment A/c Dr.50,00,000
    Loss on Issue of Debentures A/c Dr.5,00,000
    To 9% Debentures A/c50,00,000
    To Premium on Redemption of Debentures A/c5,00,000
    (Being debentures issued at par, redeemable at 10% premium)
    1 mark

Answer: (i) Bank ₹ 44,00,000; allotment with Loss ₹ 2,00,000 to Debentures ₹ 40,00,000, Securities Premium ₹ 4,00,000, Premium on Redemption ₹ 2,00,000 (ii) Bank ₹ 50,00,000; allotment with Loss ₹ 5,00,000 to Debentures ₹ 50,00,000 and Premium on Redemption ₹ 5,00,000

Where the marks are

  • Each of the four entries (1 mark each)

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 67/5/1: 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.