Question

Iron Products Ltd. issued 5,000; 9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows:
(i) ₹ 40, including premium of ₹ 10 on applications;
(ii) ₹ 45, including premium of ₹ 15 on allotment and
(iii) Balance as first and final call.
The issue was subscribed and allotment made. Calls were made and due amount was received.
Pass Journal entries.

Answer 1

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

Explanation:

Given,

Iron Products Ltd. issued 5,000;

9% Debentures of ₹ 100 each at a premium of ₹ 40 payable as follows:

(i) ₹ 40, including premium of ₹ 10 on applications;

(ii) ₹ 45, including premium of ₹ 15 on allotment and

(iii) Balance as first and final call.

The issue was subscribed and allotment made.

Calls were made and due amount was received.

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