Question

Nipa Limited issued ₹ 10,00,000 Debentures of ₹ 100 each at a premium of 10%, payable 25% on application (including premium) and the balance on allotment. The debentures were applied for and the amount was dully received.
You are required to give Journal entries and prepare Cash Book.

Answer 1

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dully received. You are required to give Journal entries and prepare Cash Book. ... Premium (Rs 100 × 10%) = Rs 10. ∴ Issue ... Rs 25 including premium of Rs 10 (i.e. Rs 10 + 15).

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Answer 2

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

Explanation:

Given,

Nipa Limited issued ₹ 10,00,000 Debentures of ₹ 100 each at a premium of 10%, payable 25% on application (including premium) and the balance on allotment.

The debentures were applied for and the amount was dully received.

Face value $=R s .100$

Premium $10 \%=(100 \times 10 \%) \mathrm{Rs} .10$

Issue Price $=\mathrm{Rs} .110$

Payable as:

                                                           Rs. 25 including premium

On Application $(25 \%)(10+15)$                of Rs.10

On Allotment $(85 \%)$                                 Rs.85 per

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