A.Ltd. issued 10,000, 10% Debentures of Rs 100 each at a premium of 5% payable as follows Rs 10 on Application; Rs 20 along with premium on allotment and balance on First and Final call. Record necessary Journal Entries.
Answers
Given : A.Ltd. issued 10,000, 10% Debentures of Rs 100 each at a premium of 5% payable as follows Rs 10 on Application; Rs 20 along with premium on ……..
Concept :
DEBENTURE :
- Debenture is a written acknowledgement of debt taken by the company.
- Debentures can be issued with /without charge on the assets.
- Debentures can be converted into equity shares.
- The debentures can be redeemed in lump sum or in installments.
- Debentures are shown under the head Non current liabilities and subhead long term borrowings.
CALLS :
When the whole amount on shares is not paid on application and allotment, the unpaid amount may be called by directors in one or more installments after allotment. Such installments are known as calls.
For A.Ltd. to record the above the journal entries are in the attachment below :
Hope this answer will help you..
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Y.Ltd. issued 2,000, 6% Debentures of Rs 100 each payable as follows Rs 25 on application; Rs 50 on allotment and Rs 25 on First and Final call.
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