Question

Pass journal entries relating to issue of debentures in the books of Star Ltd. in each of the following cases:

1. Issued 50,000, 9% Debentures of ₹ 100 each at a discount of 10%, redeemable at par.
2. Issued 6,000, 9% Debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%.
3. Issued 4,000, 10% Debentures of ₹ 100 each at par, redeemable at a premium of 5%.

Answer 1

Journal Entries
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
(i)	Bank A/c   ...Dr.		45,00,000
	To Debenture Application and Allotment A/c			45,00,000
	(Being debenture application and allotment money received)
	Debenture Application and Allotment A/c   ...Dr.		45,00,000
	Discount on Issue of Debentures A/c   ...Dr.		5,00,000
	To 9% Debentures A/c			50,00,000
	(Being debentures issued at discount, redeemable at par)
(ii)	Bank A/c   ...Dr.		6,30,000
	To Debenture Application and Allotment A/c			6,30,000
	(Being debenture application and allotment money received)
	Debenture Application and Allotment A/c   ...Dr.		6,30,000
	Loss on Issue of Debentures A/c   ...Dr.		60,000
	To 9% Debentures A/c			6,00,000
	To Securities Premium A/c			30,000
	To Premium on Redemption of Deb. A/c			60,000
	(Being debentures issued at premium, redeemable at premium)
(iii)	Bank A/c   ...Dr.		4,00,000
	To Debenture Application and Allotment A/c			4,00,000
	(Being debenture application and allotment money received)
	Debenture Application and Allotment A/c   ...Dr.		4,00,000
	Loss on Issue of Debentures A/c   ...Dr.		20,000
	To 9% Debentures A/c			4,00,000
	To Premium on Redemption of Deb. A/c			20,000
	(Being debentures issued at par, redeemable at premium)