Question

Hindustan Ltd. issued 5,000; 10% Debentures of ₹ 100 each on 1st April, 2025. The issue was fully subscribed. As per the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March.

Pass necessary Journal entries related to the debenture interest for the year ending 31st March, 2026 and transfer of interest on debentures of the year to the Statement of Profit & Loss.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
30 Sept. 2025	Debenture Interest A/c   ...Dr.		25,000
	To Bank A/c			25,000
	(Being half-yearly interest on 10% Debentures paid)
31 March 2026	Debenture Interest A/c   ...Dr.		25,000
	To Bank A/c			25,000
	(Being half-yearly interest on 10% Debentures paid)
31 March 2026	Statement of Profit and Loss A/c   ...Dr.		50,000
	To Debenture Interest A/c			50,000
	(Being total debenture interest for the year transferred to Statement of Profit and Loss)

Working Note:

Face Value of Debentures:

5,000 × ₹ 100 = ₹ 5,00,000

Annual Interest:

₹ 5,00,000 × 10% = ₹ 50,000

Half-Yearly Interest:

₹ 50,000 × `6/12` = ₹ 25,000