Question

Pass Journal entries relating to issue of debentures in the books of Unicorn Ltd. in each of the following cases:

1. Issued 20,000, 8% Debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%.
2. Issued 8,000, 8% Debentures of ₹ 100 each at a discount of 10%, redeemable at a premium of 10%.
3. Issued 3,000, 8% Debentures of ₹ 100 each at par, redeemable at a premium of 10%.

Answer 1

Journal Entries
In the books of Uniform Limited
Date	Particulars	L.F.	Amount Dr.	Amount Cr.
(i)	Bank A/c   ...Dr.		22,00,000
	To 8% Debenture Application and Allotment A/c			22,00,000
	(Being debenture application and allotment money received)
	8% Debenture Application and Allotment A/c   ...Dr.		22,00,000
	Loss on Issue of Debenture A/c   ...Dr.		1,00,000
	To 8% Debenture A/c			20,00,000
	To Securities Premium A/c			2,00,000
	To Premium on Redemption of Deb. A/c			1,00,000
	(Being debentures application and allotment amount due)
(ii)	Bank A/c   ...Dr.		7,20,000
	To 8% Debenture Application and Allotment A/c			7,20,000
	(Being Debenture Application and Allotment money received)
	Debenture Application and Allotment A/c   ...Dr.		7,20,000
	Loss on Issue of Debenture A/c   ...Dr.		1,60,000
	To 8% Debenture A/c			8,00,000
	To Premium on Redemption of Deb. A/c			80,000
	(Being Debenture Application and Allotment amount due)
(iii)	Bank A/c   ...Dr.		3,00,000
	To 8% Debenture Application and Allotment A/c			3,00,000
	(Being debenture application and allotment money received)
	8% Debenture Application and Allotment A/c   ...Dr.		3,00,000
	Loss on Issue of Debenture A/c   ...Dr.		30,000
	To 8% Debentures A/c			3,00,000
	To Premium on Redemption of Deb. A/c			30,000
	(Being debentures application and allotment amount due)