Question

T. Ltd. offered 2,00,000, 8% Debenture of Rs 500 each on June 30, 2002 at a premium of 10% payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3,00,000 debenture and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debenture.

Answer 1

Explanation:

1. Bank A/c  Dr.  6,00,00,000

To 8% Debenture Application A/c  6,00,00,000

(8% Debenture application money received for 3,00,000  debentures at Rs 200 each)

2. 8% Debenture Application A/c  Dr. 6,00,00,000

To 8% Debenture A/c  3,00,00,000

To 8% Debenture Allotment A/c  2,00,00,000

To Securities Premium A/c 1,00,00,000

(8% Debenture Application money of 2,00,000 debentures at Rs 200 each including Rs 50 premium transferred to Debenture Account and rest of the amount adjusted on allotment)

3. 8% Debenture Allotment A/c  Dr. 7,00,00,000

To 8% Debenture A/c  7,00,00,000

(8% Debenture allotment on 2,00,000 debentures at Rs 350 due)

4. Bank A/c  Dr.  5,00,00,000

To 8% Debenture Allotment A/c  5,00,00,000

(8% Debenture Allotment money received)