Question

Pass necessary journal entries of ‘Issue of debentures’ for the following: (i) S Ltd issued 150, 15% Debentures of Rs 100 each at a discount of 10%. (ii) J Ltd issued 600, 9% Debentures of Rs. 100 each at a premium of Rs 10 per Debenture ​

Answer 1

Answer:

Journal Entries

(I) Bank A/c Dr. 13,500

Discount on Issue Dr. 1,500

of Debentures A/c

To 15% Debentures A/c 15,000

(ii) Bank A/c Dr. 66,000

To 9% Debentures A/c 60,000

To Securities Premium A/c 6,000

Explanation:

(I) Amount received- 150*100=15000-10% of 15,000=15,000-1,500=13,500.