Question

A company issued 1000 10% debentures of 100 each at par, payable rs 40 on application and the balance on allotment . the public applied for 800 debentures. these applications were accepted. all moneys were received give journal entries. please give answer fast

Answer 1

10% debentures of ₹100 each are payable ₹40 on application. Amount payable on allotment = 100 - 40 = ₹60 per debenture.

Following are the journal entries in the books of the company:

• Bank a/c  dr.  32,000

                  to debenture application a/c  32,000

(being application money received for 800 debentures @ ₹40 per debenture.)

• Debenture application a/c  dr.  32,000

                                   to 10% debentures a/c  32,000

(being application money transferred to debenture account on their allotment.)

• Debenture allotment a/c  dr.  48,000

                               to 10% debenture a/c  48,000

(being allotment amount due @ ₹60 per debenture.)

• Bank a/c  dr.  48,000

                 to debenture allotment a/c  48,000

(being amount due on allotment of debentures received.)