question_answer

Pass the necessary journal entries for the issue of debentures in the following cases:

(i) 20,000, 12% debentures of Rs. 50 each issued at 10% premium, repayable at 20% premium.

(ii) 15,000, 10% debentures of Rs. 100 each issued at 10% premium, repayable at par.

(iii) 20,000, 12% debentures of Rs.50 each issued at par, repayable at 10% premium.

Answer:

                                                                        JOURNAL

Date	Particulars		LF	Amt (Dr)	Amt (Cr)
(i)	Bank A/c \[(20,000\times 55)\]	Dr		11,00,000
	To Debentures Application and Allotment A/c				11,00,000
	(Being  the receipt of application money)
	Debenture Application and Allotment A/c	Dr		11,00,000
	Loss on Issue of Debentures A/c	Dr		2,00,000
	To 12% Debentures A/c \[(20,000\times 50)\]				10,00,000
	To Premium on Redemption of Debentures A/c \[(20,000\times 10)\]				2,00,000
	To Securities Premium Reserve \[(20,000\times 5)\]				1,00,000
	(Being application money transferred to 12% debentures account )
(ii)	Bank A/c \[(15,000\times 110)\]	Dr		16,50,000
	To Debenture Application and Allotment A/c				16,50,000
	(Being the receipt of application money)
	Debenture Application and Allotment A/c	Dr		16,50,000
	To 10% Debenture A/c \[(15,000\times 100)\]				15,00,000
	To Securities Premium Reserve A/c \[(15,000\times 10)\]				1,50,000
	(Being the issue of 10% debentures at 10% Premium, repayable at par)
(iii)	Bank A/c \[(20,000\times 50)\]	Dr		10,00,000
	To Debenture Application and Allotment A/				10,00,000
	(Being application money received)
	Debenture Application and Allotment A/c	Dr		10,00,000
	Loss on Issue of Debentures A/c	Dr		1,00,000
	To 12% Debenture A/c \[(20,000\times 50)\]				10,00,000
	To Premium on Redemption of Debentures A/c \[(20,000\times 5)\]				1,00,000
	(Being issue of 12% debentures of par payable at 10% premium)