Pass necessary journal entries relating to the issue of Debentures for the following:
(a) Issued ₹ 4,00,000; 9% Debentures of ₹ 100 each at a premium of 8% redeemable at 10% premium.
(b) Issued ₹ 6,00,000; 9% Debentures of ₹ 100 each at par, repayable at a premium of 10%.
(c) Issued ₹ 10,00,000; 9% Debentures of ₹ 100 each at a premium of 5%,redeemable at par.
Answers
Solution:
Journal Entries
Sr. No. Particulars Debit Rs. Credit Rs.
a. Bank Ac Dr. 4,32,000
To Debenture Application and Allotment A/c 4,32,000
(Being application money received on 4.000 9% debentures )
Debenture Application and Allotment A/C Dr. 4,32,000
Loss on Issue of Debentures A/c Dr. 40,000
To 9% Debenture A/c 4,00,000
To Securities Premium Reserve A/c 32,000
To Premium on Redemption of debentures Rs 40,000
(Being 4,000 9% debenture issued at a premium of Rs .8 and redeemable at premium of 10%)
b. Bank Ac Dr. 6,00,000
To Debenture Application and Allotment A/c 6,00,000
(Being application money received on 6.000 9% debentures)
Debenture Application and Allotment A/c Dr. 6,00.000
Loss On Issue of debentures A/c Dr. 60,00
To 9% Debenture Ac 6,00,000
To premium on Redemption of Debentures A/c 60,000
(Being 6,000 9% debentures issued at par and redeemable at premium of 10%)
c. Bank AC Dr. 10,50,000
To Debenture Application and Allotment Ac 10,50,000
(Being application money received on 10.000 9% debentures)
Debenture Application and Allotment AC Dr. 10,50,000
To 9% Debenture A/c 10,00,000
To Securities Premium Reserve Ac 50,000
(Being 1,000 9% debentures issued at a premium of Rs.5)