Question

On 1st April, 2022, Harbour Ltd. issued 50,000, 6% Debentures of ₹ 100 each to the public at a discount of 5% to be redeemed after three years at a premium of 7%.
On this date, the company also issued 1,00,000 Equity shares of ₹ 10 each at a premium of ₹ 2 per share.
Both the issues were fully subscribed.

You are required to prepare the following accounts for the year 2022-23 in the books of Harbour Ltd.:

1. 6% Debentures Account.
2. Loss on issue of Debentures Account

Answer 1

i.

Dr.	In the Books of Harbour Ltd. 6% Debentures Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2022			2022
1st April	To Balance c/d	50,00,000	1st April	By 6% Debentures Application & Allotment A/c	47,50,000
				By Discount on Issue of Debentures	2,50,000
		50,00,000			50,00,000

ii.

Dr.	Loss on Issue of Debentures Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2022			2022
1st April	To Discount on Issue of Debentures A/c	2,50,000	31st March	By Securities Premium Reserve A/c	2,00,000
1st April	To Premium on Redemption of Debentures A/c	3,50,000	31st March	By Statement of Profit & Loss	4,00,000
		6,00,000			6,00,000