Question

On '5%' Ltd issued '3%' debentures of Rs. 100 each at a discount of '40,000,8%' redeemable at a premium of '1-4-2017,xx' after 3 years. The amount was payable as follows:On application Rs.50 per debentureBalance on allotmentX Ltd has a balance of Rs. 1,50,000 in securities premium reserve and Rs.80,000 in General Reserve. Loss for the year was Rs. 50,000Pass the journal entries for the issue of debentures and writing off the loss on issue of debentures.​

Answer 1

Explanation:

Face Value of Debenture = Rs 100

Premium (Rs 100 × 10%) = Rs 10

∴ Issue Price = Rs 110

Amount Payable as:

On Application (25%)

Rs 25 including premium of Rs 10 (i.e. Rs 10 + 15)

On Allotment (85%)

Rs 85 per debenture

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