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Question
Amay Ltd invited applications for issuing 10,000, 8% debentures of ₹ 100 each. The amount was payable as follows:
₹ 30 on application and ₹ 70 on allotment. The public applied for 12,000 debentures. Applications for 8,000 debentures were accepted in full; applications for 3,000 debentures were allotted 2,000 debentures and the remaining applications were rejected. All money was duly received. Pass the necessary journal entries in the books of the company for the above transactions.
Solution
| In the books of Amay Ltd. Journal Entries |
||||
| Date | Particular | L.F. | Amount Dr. (₹) |
Amount Cr. (₹) |
| 1. | Bank A/c ...Dr. | 3,60,000 | - | |
| To Debenture Application A/c | - | 3,60,000 | ||
| (Being application money received) | ||||
| 2. | Debenture Application A/c ...Dr. | 3,60,000 | - | |
| To 8% Debentures A/c | - | 3,00,000 | ||
| To Debenture Allotment A/c (1,000 × 30) | - | 30,000 | ||
| To Bank A/c (1,000 × 30) | - | 30,000 | ||
| 3. | Debenture Allotment A/c ...Dr. | 7,00,000 | - | |
| To 8% Debentures A/c | - | 7,00,000 | ||
| (Being allotment money due) | ||||
| 4. | Bank A/c ...Dr. | 6,70,000 | - | |
| To Debenture Allotment A/c | - | 6,70,000 | ||
| (Being allotment money received) | ||||
Note: ₹ 30,000 towards allotment have been received in advance. Hence ₹ 6,70,000 will be received for allotment.
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----- |
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