Issue of Debentures> Calls-In-Advance

A. For Calls-in-Advance

1. When the issue is oversubscribed and excess application money is retained to adjust against future calls:

Debentures Application A/c              Dr.

        To Calls-in-Advance A/c

(Being the excess application money retained as calls-in-advance)

2. When debenture holders pay the call amount in advance:

Bank A/c                                Dr.

        To Calls-in-Advance A/c

(Being the amount of call money received in advance)

3. When the call becomes due and is adjusted:

Calls-in-Advance A/c                    Dr.

        To Debentures First Call A/c

(Being the calls-in-advance adjusted against the call due)

B. For Interest on Calls-in-Advance:

1. On interest becoming due on Calls-in-Advance:

Interest on Calls-in-Advance A/c        Dr.

        To Sundry Debentureholders’ A/c

(Being interest payable on calls-in-advance)

2. On payment of interest on Calls-in-Advance:

Sundry Debentureholders’ A/c            Dr.

          To Bank A/c

(Being the payment of interest on calls-in-advance)

3. On transferring interest on Calls-in-Advance to Profit & Loss A/c:

Statement of Profit & Loss A/c (Finance Cost)     Dr.

         To Interest on Calls-in-Advance A/c

(Being the interest transferred to the profit and loss account)