Question

A limited company bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of ​₹ 100 each at a discount of 10%. Give journal entries.

Answer 1

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ANSWER OF YOUR QUESTION IS

XYZ Ltd. issued 5,000, 10% Debentures of ₹ 100 each on 1st April, 2015 at a discount of 10% redeemable at a premium of 10% after 4 years. Give journal entries for the year ended 31st March, 2016, assuming that the interest was payable half-yearly on 30th September and 31st March. Tax is to be deducted @ 10%.

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Answer 2

The necessary Journal entries in the books of the company are calculated and prepared below:

Explanation:

Given,

A limited company bought a Building for ₹ 9,00,000 and the consideration was paid by issuing 10% Debentures of the normal (face) value of ​₹ 100 each at a discount of 10%.

Calculation of Number of Debentures Issued

Number of Debentures issued

$=\frac{\text { Purchase Consideration }}{\text { Issue Price }}$

$=\frac{9,00,000}{90}=10,000 \quad debentures$

The necessary Journal entries in the books of the company are calculated and prepared below: