Question

Pass journal entries in the book of X Ltd. in the following cases:

1. The Company took a loan of ₹ 1,60,000 from SBI and issued 2,000, 12% debentures of ₹ 100 each as collateral security.
2. Issued 1,000, 12% debentures of ₹ 100 each at 10% premium, redeemable at a premium of 5%.

Purchased machinery ₹ 4,60,000, from Beta Ltd. Payment was made by issue of 9% debentures of ₹ 100 each at a premium of 15% redeemable at par.

Answer 1

Books of X Ltd. Journal Entries
Date	Particulars	L.F.	A (₹)	B (₹)
(i)	Bank A/c    ...Dr.		1,60,000	-
	To Loan from SBI A/c		-	1,60,000
	(Being Loan raised)
	Debenture Suspense A/c    ...Dr.		2,00,000	-
	To 12% Debentures A/c		-	2,00,000
	(Being 2000, 12% Debenture of ₹ 100 each issued as collateral security to SBI)
(ii)	Bank A/c    ...Dr.		1,10,000	-
	To Debenture Application and Allotment A/c		-	1,10,000
	(Being debenture application money received)
	Debenture Application and Allotment A/c    ...Dr.		1,10,000	-
	Loss on issue of Debenture A/c		5,000	-
	To 12% Debenture A/c		-	1,10,000
	To Securities premium reserve A/c		-	10,000
	To premium on redemption of debentures A/c		-	5,000
	(Being debentures issued at Premium redeemable at premium)
(iii)	Machinery A/c    ...Dr.		4,60,000	-
	To Bata Ltd.		-	4,60,000
	(Being machinery purchased from Beta Ltd.)
	Beta Ltd.    ...Dr.		4,60,000	-
	To 9% Debenture A/c		-	4,00,000
	To Securities Premium Reserve A/c		-	60,000
	(Being 9% Debentures of ₹ 100 each issued to Beta Ltd. at 15% premium)

Working Note:

No. of Debenture issued = `(₹4,60,000)/115` = ₹ 4,000