Question

Zed ltd. Issued 2,00,000, 8% debentu res of Rs. 100 each at a discount of 6% red ee m ab le at

a Prem iu m of 10% after 5 years. The amount was paya bl e as follows :

On App licatio n - Rs. 50 per debentu re and Balance on Allotment

Reco rd t he necessary journal entries for the issue of d ebent ures in t he books of Zed ltd.​

Answer 1

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Answer 2

JOURNAL ENTRIES IN THE BOOKS OF ZED LTD.

Explanation:

JOURNAL ENTRIES IN THE BOOKS OF ZED LTD.

(a) Bank A/c                                    Dr.     1,00,00,000

             To Debenture Application A/c                   1,00,00,000

(b) Debenture Application  a/c     Dr.    1,00,00,000

                     To Debentures a/c                            1,00,00,000

 

(c) Debenture Allotment  a/c              Dr.    88,00,000

      Loss on Issue of debentures a/c Dr.     32,00,000

                      To Debentures a/c                                               1,00,00,000

                      To Premium on redemption of debentures a/c    20,00,000

       

(d) Bank A/c                                   Dr.     88,00,000

             To Debenture Allotment a/c                         88,00,000