• Aishwarya Ltd. issued 7,000, 10% Debentures of 1,000 each at a discount of 10
redeemable at a premium of 5% after 4 years. According to the terms of issue 300
payable on a application and balance on allotment of debentures.
Record necessary entries regarding issue of 10% Debentures.
Answers
the entry was
bank ....dr 63 lakhs
loss on issue of debentures...dr 10.5 lakhs
to debentures a/c 70 lakhs
to premium on redemption a/c 3.5 lakhs
- bank acc = deb appn amount : 21 lakhs
deb allotment : 42 lakhs
total : 63 lakhs
- discount =7000*1000*10% = 7 lakhs
A journal entry is a business transaction record in the enterprise's accounting books.
- The correct journal entries are -
Bank A/c Dr. 21,00,000
To Debentures Application A/c 21,00,000
( Being application money received on 7000, 10% debentures)
Debentures Application A/c Dr. 21,00,000
To 10% Debentures A/c 21,00,000
( Being application money adjusted)
Debentures Allotment A/c Dr. 42,00,000
Loss on issue of Debentures A/c Dr. 10,50,000
To 10% Debentures A/c 49,00,000
To Premium on redemption A/c 3,50,000
( Being allotment money due on 7,000)
Bank A/c Dr. 42,00,000
To Debentures Allotment A/c 42,00,000
( Being allotment money duly received)