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Question
On 1.4.2015, KVK Ltd. issued 15,000, 9% debentures of Rs 100 each at a discount of 7%, redeemable t a premium of 10% after 10 years. The company closes its books on 31st March every year. Interest on 9%debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.
Pass necessary journal entries for the issue of 9% debentures and debenture interest for the year ended 31.3.2016.
Solution
| Journal | ||||
| Date | Particulars | L.F |
Dr. Rs |
Cr. Rs |
|
2015 Apr 1
|
Bank A/c (15,000 × Rs 93) Dr To Debenture Application and Allotment A/c (Being received application money on 15,000 Debenture.) |
13,95,000
|
13,95,000
|
|
|
Apr 1
|
Debenture Application and Allotment A/c Dr Discount on Issued of Debentures A/c(15,000 × Rs 7) Dr Loss on Issued of Debentures A/c (15,000 x Rs 10) To 9% Debentures A/c (15,000 x Rs 100) To Premium on Redemption of Debentures A/c (15,000x Rs10) (Being application money transferred to Debenture Account.) |
13,95,000 1,05,000 1,50,000
|
15,00,000 1,50,000
|
|
|
Sep 30
|
Debenture Interest A/c (1500000 x 9% x 6/12) Dr To Debentures holder’s A/c To TDS Payable A/c (Being interest due.) |
67,500
|
60,750 6,750
|
|
|
Sep 30
|
Debentures holder’s A/c Dr TDS Payable A/c Dr To Bank A/c (1500000 x 9% x 6/12) (Being interest Paid.) |
60,750 6,750
|
67,500
|
|
|
2016 Mar 31
|
Debenture Interest A/c (1500000 x 9% x 6/12) Dr To Debentures holder’s A/c To TDS Payable A/c (Being interest due.) |
67,500
|
60,750 6,750
|
|
|
Mar 31
|
Debentures holder’s A/c Dr. TDS Payable A/c Dr. To Bank A/c (1500000 x 9% x 6/12) (Being interest Paid.) |
60,750 6,750
|
67,500
|
|
|
Mar 31
|
Statement of Profit & Loss A/c Dr. To Bank A/c (15,00,000 x 9%) (Being interest transferred to Profit & Loss Account.) |
1,35,000
|
1,35,000
|
|
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