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Question
A.Ltd. issued 50,00,000, 8% Debenture of Rs 100 at a discount of 6% on April 01, 2009 redeemable at premium of 4% by draw of lots as under:
20,00,000 Debentures on March, 2011
10,00,000 Debentures on March, 2013
20,00,000 Debentures on March, 2014
Compute the amount of discount to be written-off in each year till debentures are paid. Also prepare discount/loss on issue of debenture account.
Solution 1
Loss on issue of debenture = 6% (discount on issue) + 4% (premium on redemption) = 10%
`50,00,000 xx 100 xx 10/100 = 5,00,00,000`
|
At the end of |
Debenture Outstanding |
Ratio |
Loss to be written off every year |
||
|
March 2010 |
50,00,00,000 |
5 |
`5,00,00,000 xx 5/18` |
= |
1,38,88,889 |
|
March 2011 |
50,00,00,000 |
5 |
`5,00,00,000 xx 5/18` |
= |
1,38,88,889 |
|
March 2012 |
30,00,00,000 |
3 |
`5,00,00,000 xx 3/18` |
= |
83,33,333 |
|
March 2013 |
30,00,00,000 |
3 |
`5,00,00,000 xx 3/18` |
= |
83,33,333 |
|
March 2014 |
20,00,00,000 |
2 |
`5,00,00,000 xx 2/18` |
= |
55,55,556 |
|
|
|
18 |
|
|
Rs 5,00,00,000 |
Loss on Issue of Debenture Account
|
Dr. |
|
|
|
|
|
|
Cr. |
|
|
Date |
Particulars |
J.F. |
Amount Rs |
Date |
Particulars |
J.F. |
Amount Rs |
|
|
2009 April 01 |
Debenture |
|
5,00,00,000 |
2010 March 31 |
Profit and Loss |
|
1,38,88,889 |
|
|
|
|
|
|
|
Balance c/d |
|
3,61,11,111 |
|
|
|
|
|
5,00,00,000 |
|
|
|
5,00,00,000 |
|
|
2010 April 01 |
Balance b/d |
|
3,61,11,111 |
2011 March 31 |
Profit and Loss |
|
1,38,88,889 |
|
|
|
|
|
|
|
Balance c/d |
|
2,22,22,222 |
|
|
|
|
|
3,61,11,111 |
|
|
|
3,61,11,111 |
|
|
2011 April 01 |
Balance b/d |
|
2,22,22,222 |
2012 March 31 |
Profit and Loss |
|
83,33,333 |
|
|
|
|
|
|
|
Balance c/d |
|
1,38,88,889 |
|
|
|
|
|
2,22,22,222 |
|
|
|
2,22,22,222 |
|
|
2012 April 01 |
Balance b/d |
|
1,38,88,889 |
2013 March 31 |
Profit and Loss |
|
83,33,333 |
|
|
|
|
|
|
|
Balance c/d |
|
55,55,556 |
|
|
|
|
|
1,38,88,889 |
|
|
|
1,38,88,889 |
|
|
2013 April 01 |
Balance b/d |
|
55,55,556 |
2014 March 31 |
Profit and Loss |
|
55,55,556 |
|
|
|
|
|
55,55,556 |
|
|
|
55,55,556 |
|
Solution 2
| Journal of A Ltd. | ||||
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| 2009 | ||||
| April 1 | Bank A/c ...Dr. | 47,00,00,000 | ||
| To Debenture application and allotment | 47,00,00,000 | |||
| (Being application money received) | ||||
| April 1 | Debenture application and allotment A/c | 47,00,00,000 | ||
| Loss on issue of debenture | 5,00,00,000 | |||
| To 8% Debenture | 50,00,00,000 | |||
| To Premium on Redemption | 2,00,00,000 | |||
| (Being amount transferred to debenture A/c) | ||||
| 2010 | ||||
| Mar. 31 | Statement of profit and loss A/c ...Dr. | 5,00,00,000 | ||
| To loss on issue of debenture A/c | 5,00,00,000 | |||
| (Being loss on issue charged to statement of profit and loss account) | ||||
| 2019 | ||||
| April 30 | Debenture redemption Investment A/c ...Dr. | 3,00,00,000 | ||
| To Bank A/c | 3,00,00,000 | |||
| (Being amount invested) | ||||
| 2020 | ||||
| Mar. 31 | 8% Debenture A/c ...Dr. | 20,00,00,000 | ||
|
Premium on redemption A/c ...Dr. |
80,00,000 | |||
| To Debenture holder A/c | 20,80,00,000 | |||
| (Being amount transfer to debenture holder A/c) | ||||
| Mar. 31 | 8% Debenture holder A/c ...Dr. | 20,80,00,000 | ||
|
To Bank A/c |
20,80,00,000 | |||
| (Being amount paid to Debenture holder) | ||||
| April 30 | Bank A/c ...Dr. | 1,50,00,000 | ||
| To Debenture redemption Investment A/c | 1,50,00,000 | |||
| (Being debenture Investment sold) | ||||
| 2021 | ||||
| Mar. 31 | 8% Debenture A/c ...Dr. | 10,00,00,000 | ||
| Premium on redemption A/c ...Dr. | 40,00,000 | |||
| To Debenture holder A/c | 10,40,00,000 | |||
| (Being amount transfer to Debenture holder A/c) | ||||
| Mar. 31 | Debenture holder A/c ...Dr. | 10,40,00,000 | ||
| To Bank A/c | 10,40,00,000 | |||
| (Being amount paid to debenture holder) | ||||
| Apr. 30 | Debenture Redemption Investment A/c ...Dr. | 1,50,00,000 | ||
| To Bank A/c | 1,50,00,000 | |||
| (Being amount Invested) | ||||
| 2022 | ||||
| Mar. 31 | Bank A/c ...Dr. | 3,00,00,000 | ||
| To Debenture Redemption Investment A/c | 3,00,00,000 | |||
| (being Investment sold) | ||||
| Mar. 31 | 8% Debenture A/c ...Dr. | 20,00,00,000 | ||
| Premium on Redemption A/c ...Dr. | 80,00,000 | |||
| To Debenture holder A/c | 20,80,00,000 | |||
| (Being amount transfer to debenture holder A/c) | ||||
| Mar. 31 | Debenture holder A/c ...Dr. | 2,08,00,000 | ||
| To Bank A/c | 2,08,00,000 | |||
| (Being amount paid to debenture holder) | ||||
| Loss on Issue of Debenture A/c | |||||
| Date | Particular | Amount | Date | Particular | Amount |
| 2009 | 2010 | ||||
| April 1 | To 8% Debenture A/c | 5,00,00,000 | Mar. 31 | By Statement of Profit and loss A/c | 5,00,00,000 |
| 5,00,00,000 | 5,00,00,000 | ||||
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