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Question
Pass journal entries relating to issue of debentures for the following transactions:
- Issued 8,000, 10% debentures of ₹ 100 each at a discount of 10%, redeemable at 5% premium.
- Issued 4,000, 12% debentures of ₹ 100 each at 10% premium, redeemable at 6% premium.
- Issued ₹ 1,00,000, 9% debentures of ₹ 100 each at par redeemable at par.
- Issued ₹ 5,00,000, 9% debentures of ₹ 100 each at 10% premium redeemable at par.
- Issued ₹ 6,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at par.
Solution
| Journal Entries | ||||
| Date | Particulars | L.F. | Amount Dr. (₹) |
Amount Cr. (₹) |
| (a) 1. | Bank A/c ...Dr. | 7,20,000 | - | |
| To 10% debenture application and Allotment A/c |
- | 7,20,000 | ||
| (Being debenture money received) | ||||
| 2. | 10% debenture application and Allotment A/c ...Dr. |
7,20,000 | - | |
| Discount on Issue of debenture A/c ...Dr. | 80,000 | - | ||
| Loss on Issue of debenture A/c ...Dr. | 40,000 | - | ||
| To 10% debenture A/c | - | 8,00,000 | ||
| To Premium on Redemption of debenture A/c | - | 40,000 | ||
| (Being debenture issued) | ||||
| (b) 1. | Bank A/c ...Dr. | 4,40,000 | - | |
| To 12% Debenture Application and Allotment A/c |
- | 4,40,000 | ||
| (Being debenture money received) | ||||
| 2. | 12% Debenture Application and Allotment A/c ...Dr. |
4,40,000 | - | |
| Loss on Issue of debenture A/c ...Dr. | 24,000 | - | ||
| To 12% Debentures A/c | - | 4,00,000 | ||
| To Securities Premium Reserve A/c | - | 40,000 | ||
| To Premium on Redemption of Debenture A/c | - | 24,000 | ||
| (Being debentures issued) | ||||
| (c) 1. | Bank A/c ...Dr. | 1,00,000 | - | |
| To Debenture Application and Allotment A/c | - | 1,00,000 | ||
| (Being debenture money received) | ||||
| 2. | Debenture Application and Allotment A/c ...Dr. | 1,00,000 | - | |
| To 9% Debentures A/c | - | 1,00,000 | ||
| (Being debentures issued) | ||||
| (d) 1. | Bank A/c ...Dr. | 5,50,000 | - | |
| To Debenture Application and Allotment A/c | - | 5,50,000 | ||
| (Being amount of Debenture received) | ||||
| 2. | Debenture Application and Allotment A/c ...Dr. | 5,50,000 | - | |
| To 90% Debenture A/c | - | 5,00,000 | ||
| To Securities Premium Reserve A/c | - | 50,000 | ||
| (Being debentures issued) | ||||
| (e) 1. | Bank A/c ...Dr. | 5,40,000 | - | |
| To Debenture Application and Allotment A/c | - | 5,40,000 | ||
| (Being amount of Debenture received) | ||||
| 2. | Debenture Application and Allotment A/c ...Dr. | 5,40,000 | - | |
| Discount on Issue of Debenture A/c ...Dr. | 60,000 | - | ||
| To 9% Debentures A/c | - | 6,00,000 | ||
| (Being debentures issued) | ||||
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