Question

On 1^st October, 2022, Ninza Ltd. issued 4,000, 8% Debentures of ₹ 100 each at a discount of 10%. The company had a balance of ₹ 50,000 in the Securities Premium Account on the same date.

Pass necessary journal entries for issue of debentures and to write off a discount on issue of debentures.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. Amount (₹)	Cr. Amount (₹)
	Bank A/c   ...Dr.		3,60,000
	To 8% Deb. App. and Allot. A/c			3,60,000
	(Being debenture money received)
	8% Deb. App. and Allot. A/c   ...Dr.		3,60,000
	Discount on issue of deb. A/c   ...Dr.		40,000
	To 8% Debentures A/c			4,00,000
	(Being debentures, money transferred to debenture account)
	Securities Premium A/c   ...Dr.		40,000
	To Discount on issue of deb. A/c			40,000
	(Being Discount on issue of debentures written off)