Question

Pass necessary journal entries in the following cases

Jay Ltd. redeemed 1,500, 12% debentures of Rs 1,000 each issued at a discount of 10% by converting them into equity shares of Rs 50 each issued at par.

Answer 1

Books of Jay Ltd. Journal Entry
Date	Particulars	L.F	Dr. Rs	Cr. Rs
	12% Debenture A/c         Dr.       To Debenture holder A/c       To Discount on issue of Debentures A/c (Being 1,500 12% debenture of  Rs 100 each(issued at discount of 10%) due for redemption)		15,00,000	13,50,000 1,50,000
	Debenture holder A/c               Dr.      To Equity share capital A/c (Being payment made to debenture holder by issuing Rs 27,000 equity share of Rs 50 each)		13,50,000	13,50,000

Working Note:

Number of shares to be issued = `" Amount Payable to Debentureholder"/"Price of a Share"`

Number of shares to be issued  = 1350000/50 = 27000 share