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Question
Pass necessary journal entries in the books of Z Ltd. for the following transaction:
Z Ltd. invited applications for issuing 10,000, 9% debentures of ₹ 100 each at a premium of ₹ 10 per debenture. The full amount was payable on application. Applications were received for 15,000 debentures. Applications for 3,000 debentures were rejected and the applications money was refunded. Debentures were allotted to the remaining applicants on a pro-rata basis.
Solution
| In the books of Z limited Journal Entries |
||||
| Date | Particular | L.F. | Dr. (₹) | Cr. (₹) |
| 1. | Bank A/c ...Dr. | 16,50,000 | - | |
| To Debenture Application and Allotment A/c | - | 16,50,000 | ||
| (Being debenture money received.) | ||||
| 2. | Debenture Application and Allotment A/c ...Dr. | 16,50,000 | - | |
| To 9% Debentures A/c | - | 10,00,000 | ||
| To Securities Premium Reserve A/c | - | 1,00,000 | ||
| To Banks A/c | - | 5,50,000 | ||
| (Being debentures issued.) | ||||
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