Question

On April 1, 2019 Z Ltd, issued, 10,000,8%
Debentures of Rs, 100 each at premium
of 5%, to be redeemable at a premium of
10%, after 5 years. The entire amount
was payable on application. The issue
was oversubscribed to the extent of
10,000 debentures and the allotment
was made proportionately to all the
applicants. The securities premium
amount has not been utilized for any
other purpose during the year. Give
journal entries for the issue of
debentures and writing off loss on issue
of debentures.​

Answer 1

Answer:

Bank A/C Dr. 21,00,000

To debenture application and allotment A/C 21,00,000

Debenture application and allotment A/C Dr. 21,00,000

loss on issue of debenture A/C Dr. 1,00,000

To 8% debenture A/C 10,00,000

To SPR A/C 50,000

To premium on Redemption of debenture A/C 1,00,000

To bank A/C 10,50,000

SPR A/C Dr. 50,000

statement of profit and loss A/C Dr. 50,000

To loss on issue of debenture A/C 1,00,000