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Question
Pass necessary journal entries for the issue of debentures in the following cases:
- Issued 5,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5% after 5 years.
- Issued 30,000, 12% debentures of ₹ 100 each at a premium of 5% and redeemable at par after 5 years.
- Issued 8,750, 12% debentures of ₹100 each at par, redeemable at par after 5 years.
Solution
| Journal Entries | ||||
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| (i) | Bank A/c ...Dr. | 4,50,000 | ||
| To Debenture Application & Allotment A/c | 4,50,000 | |||
| (Being application money received) | ||||
| Debenture Application & Allotment A/c ...Dr. | 4,50,000 | |||
| Loss on Issue of Debenture A/c ...Dr. | 25,000 | |||
| Discount on Issue of Debenture A/c ...Dr. | 50,000 | |||
| To 9% Debentures A/c | 5,00,000 | |||
| To Premium on Redemption of Debenture A/c | 25,000 | |||
| (Being debenture issued) | ||||
| (ii) | Bank A/c ...Dr. | 31,50,000 | ||
| To Debenture Application & Allotment A/c | 31,50,000 | |||
| (Being application money received) | ||||
| Debenture Application & Allotment A/c ...Dr. | 31,50,000 | |||
| To 12% Debentures A/c | 30,00,000 | |||
| To Securities Premium Reserve A/c | 1,50,000 | |||
| (Being debenture issued) | ||||
| (iii) | Bank A/c ...Dr. | 8,75,000 | ||
| To Debenture Application & Allotment A/c | 8,75,000 | |||
| (Being application money received) | ||||
| Debenture Application & Allotment A/c | 8,75,000 | |||
| To 12% Debentures A/c | 8,75,000 | |||
| (Being debentures issued) | ||||
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