question_answer

ABC Ltd issued 20,000, 9% debentures of Rs. 100 each at a discount of 4% payable Rs. 30 on application and the balance on allotment. The debentures are redeemable after 5 years. Give necessary journal entries for the issue of debentures.

Answer:

 JOURNAL

Date	Particulars		LF	Amt (Dr)	Amt (Cr)
	Bank A/c \[(20,000\times 30)\]	Dr		6,00,000
	To Debenture Application A/c				6,00,000
	(Being the application money on 20,000 debentures @ Rs. 30 received)
	Debenture Application A/c	Dr		6,00,000
	To 9% Debentures A/c				6,00,000
	(Being the debenture application money transferred to debentures account)
	Debenture Allotment A/c \[(20,000\times 66)\]	Dr		13,20,000
	Discount on Issue of Debentures A/c \[(20,000\times 4)\]	Dr		80,000
	To 9% Debentures A/c \[(20,000\times 70)\]
	(Being the allotment money due on 20,000 debentures)				14,00,000
	Bank A/c	Dr		13,20,000
	To Debenture Allotment A/c				13,20,000
	(Being the amount received on allotment)