Question

G. Ltd. has Rs. 800 lakh, 10% debentures of Rs. 100 each due for redemption on March 31, 2017. Give journal entries for the issue and redemption of debentures.

Answer 1

At the time of Issue

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c   ...Dr.		8,00,00,000	-
	To Debenture Application & Allotment A/c		-	8,00,00,000
	(Being application money received for 8,00,000 debentures @ Rs. 100 each)
2.	Debenture Application & Allotment A/c   ...Dr.		8,00,00,000	-
	To 10% Debentures A/c		-	8,00,00,000
	(Being application money transferred to 10% Debentures Account upon allotment at par)

At the time of Redemption (On March 31, 2017)

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2017
Mar 31	10% Debentures A/c   ...Dr.		8,00,00,000	-
	To Debentureholders A/c		-	8,00,00,000
	(Being the amount due to debentureholders on redemption at par)
Mar 31	Debentureholders A/c   ...Dr.		8,00,00,000	-
	To Bank A/c		-	8,00,00,000
	(Being the final payment made to debentureholders)