Give journal entries in each of the following alternative cases assuming the
face value of a debenture being ` 100 :
a. 100, 10 % debentures issued at ` 100, repayable at ` 100.
b. 100, 10 % debentures issued at ` 95, repayable at ` 100.
c. 100, 10 % debentures issued at ` 105, repayable at ` 100.
d. 100, 10 % debentures issued at ` 100, repayable at ` 105.
e. 100, 10 % debentures issued at ` 95, repayable at ` 105.
f. 100, 10 % debentures issued at ` 105, repayable at ` 110.
Answers
Answer:
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Given:
1) 10 % debentures issued at ` 100, repayable at ` 100.
2) 10 % debentures issued at ` 95, repayable at ` 100.
3) 10 % debentures issued at ` 105, repayable at ` 100.
4) 10 % debentures issued at ` 100, repayable at ` 105.
To Find:
Now, pass the Journal Entry
Solution:
Particulars Amount Amount
1) Bank A/c Dr. 100
To Debenture A/C 100
2) Bank A/c Dr. 95
Discount on issue of Debenture A/c 5
To, Debenture A/c 100
3) Bank A/C Dr. 100
profit on debenture A/c Dr. 5
To, premium on redemption of debenture 5
To, Debenture A/C 100
4) Bank A/C Dr. 100
loss on Debenture A/C Dr. 5
To, premium on redemption on debenture 5
To, Debenture A/C 10
NOTE: Journal Entry: A journal entry is used to record the transactions of a business in the accounting year.