Question

On 1st April, 2015. Mathew Ltd. issued 10,000, 9% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 5%. These debentures were redeemable as follows:

On 31st March, 2016	2,000 Debentures;
On 31st March, 2017	5,000 Debentures;
On 31st March, 2018	3,000 Debentures.

Prepare the Loss on Issue of Debentures Account, Debentures Account and Premium on Redemption of Debentures Account for three years.

Answer 1

In the books of Mathew Ltd.
Loss on Issue of Debentures A/c

Dr.                                                                                Cr.

Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2015				2016
April 01		To 9% Debentures A/c	1,00,000	March 31	By Statement of Profit & Loss A/c	1,00,000
			1,00,000			1,00,000

9% Debentures A/c

Dr.                                                                                 Cr.

Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2016				2015
March 31		To Debentureholders A/c	2,00,000	April 01	By Debenture Application & Allotment A/c	9,50,000
March 31		To balance c/d	8,00,000	April 01	By Loss on Issue of Debentures A/c	50,000
			10,00,000			10,00,000
2017				2016
March 31		To Debentureholders A/c	5,00,000	April 01	By balance b/d	8,00,000
March 31		To balance c/d	3,00,000
			8,00,000			8,00,000
2018				2017
March 31		To Debentureholders A/c	3,00,000	April 01	By balance b/d	3,00,000
			3,00,000			3,00,000

Premium on Redemption of Debentures A/c

Dr.                                                                                Cr.

Date		Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2016				2015
March 31		To Debentureholders A/c	10,000	April 01	By Loss on Issue of Debentures A/c	50,000
March 31		To balance c/d	40,000
			50,000			50,000
2017				2016
March 31		To Debentureholders A/c	25,000	April 01	By balance b/d	40,000
March 31		To balance c/d	15,000
			40,000			40,000
2018				2017
March 31		To Debentureholders A/c	15,000	April 01	By balance b/d	15,000
			15,000			15,000