Question

Pass necessary journal entries for the issue for the debentures in the following cases:

1. Issued ₹ 2,00,000 9% debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 15%.
2. Issued 4,000, 9% debentures of ₹ 100 each at a premium of 5% redeemable at a premium of 10%.
3. Issued ₹ 10,00,000, 9% debentures of ₹ 100 each at par redeemable at a premium of 12.5%.

Answer 1

Books of Firm Journal Entries
Date	Particulars	L.F.	Amount Dr.(₹)	Amount Cr. (₹)
(i)	Bank A/c    ...Dr.		1,80,000	-
	To Debenture Application and Allotment A/c		-	1,80,000
	(Being debenture application money received)
	Debenture Application and Allotment A/c    ...Dr.		1,80,000	-
	Loss on Issue of Debenture A/c (20,000 + 30,000)    ...Dr.		50,000	-
	To 9% Debenture A/c		-	2,00,000
	To Premium on Redemption of Debenture A/c		-	30,000
	(Being debentures issued at discount redemption or proprietor)
(ii)	Bank A/c    ...Dr.		4,20,000	-
	To Debenture Application and Allotment A/c		-	4,20,000
	(Being debenture application money received)
	Debenture Application and Allotment A/c    ...Dr.		4,20,000	-
	Loss on Issue of Debenture A/c    ...Dr.		40,000	-
	To 9% Debenture A/c		-	4,00,000
	To Security Premium Reserve A/c		-	20,000
	To Premium on Redemption of Debenture A/c		-	40,000
	(Being debentures issued at premium, redemption at premium)
(iii)	Bank A/c    ...Dr.		10,00,000	-
	To Debenture Application and Allotment A/c		-	10,00,000
	(Being debenture application money received)
	Debenture Application and Allotment A/c    ...Dr.		10,00,000	-
	Loss on Issue of Debenture A/c    ...Dr.		1,25,000	-
	To 9% Debenture A/c		-	10,00,000
	To Premium on Redemption of Debenture A/c		-	1,25,000
	(Being debentures issued at premium, redemption at premium)