Question

X Ltd. issued 12,000; 8% Debentures of ₹ 100 each at a discount of 5% payable as 25% on application; 20% on allotment and balance after three months. Pass Journal entries.

Answer 1

The necessary Journal entries in the books of the company are calculated and prepared below:

Explanation:

Given,

X Ltd. issued 12,000;

8% Debentures of ₹ 100 each at a discount of 5% payable as 25% on application;

20% on allotment and balance after three months.

Face value $=\mathrm{Rs} .100$

Discount $5 \%=(\mathrm{Rs} .100 \times 5 \%)=\mathrm{Rs} .5$

Issue Price $=\mathrm{Rs} .95$

Payable as:

On Application (25%)                            Rs. 25 per

On Allotment $(85 \%)(25-5) per$              Rs. 20

On First and Final Call (50%)                  Rs.50 per

The necessary Journal entries in the books of the company are calculated and prepared below: