Question

X Ltd. issued 10% Debentures of nominal value of ₹ 10,00,000 as follows:
(i) To sundry persons for cash at par ₹ 5,00,000 nominal.
(ii) To a vendor for ₹ 5,50,000 for purchase of fixed assets ₹ 5,00,000 nominal.
Pass journal entries in the books of X Ltd.

Answer 1

Solution:

                                                          Journal  

Particulars                                                    Dr. Rs.           Cr. Rs.

Bank A/c                                       Dr.        5,00,000

Fixed Assets A/c                          Dr.        5,50,000

      To 10% Debentures A/c                                          10,00,000

      To Security Premium Reserve A/c                           50,000

(Being purchase consideration discharged by issue of 10% Debentures)