Question

Kati Ltd. issued 8,000, 9% debentures of ₹ 100 each at a discount of 10%. The full amount
was payable on application. Applications were received for 9,000 debentures and allotment was
made on pro-rata basis. Pass the necessary journal entries for the above transactions in the
books of Kati Ltd.

Answer 1

Answer:

Journal

Bank account. dr. 810000

To 9%debenture application

& allotment account. 810000

9%debenture application

& allotment account. dr 810000

discount on issue of

debenture account. dr. 80000

To 9% debenture a/c. 800000

To bank account. 90000

Answer 2

Answer:

(i) Bank a/c Dr 8,10,000

          To Debenture Application Allotment a/c 8,10,000

(ii) Debenture Application Allotment a/c Dr 8,10,000

    Discount/loss of Debentures a/c Dr 80,000

                   To 9% Debentures 8,00,000

                    To Bank a/c 90,000

Explanation:

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