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Question
On 1st April, 2023, Zara Ltd. issued 10,000, 6% Debentures of ₹ 100 each at a discount of 5%. On 31st March, 2024, the company had ₹ 40,000 in its Capital Reserve A/c and ₹ 30,000 as balance of Securities Premium.
Give the journal entry to write off the discount on issue of issue of debentures on 31st March, 2024.
Journal Entry
Solution
| Journal Entry | ||||
| Date | Particulars | L.F. | Debit (₹) |
Credit (₹) |
| 1. | Securities Premium A/c ...Dr. | 30,000 | - | |
| Statement of P/L ...Dr. | 20,000 | - | ||
| To Discount on issue of Debentures A/c | - | 50,000 | ||
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Methods of Writing off Discount / Loss on Issue of Debentures
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