Question

Pass necessary journal entries in the following cases

Jain Ltd. converted 2,000, 12% debentures of  Rs 100 each issued at an into equity share of Rs 100 each issued at a premium of 25%.

Answer 1

Jain Ltd. Journal
Date	Particulars	L.F	Dr. Rs	Cr. Rs
	12% Debenture A/c   Dr.      To Debenture holder A/c (Being 2,000 12% debenture of Rs 100 each due for redemption)		2,00,000	2,00,000
	Debenture A/c       Dr.     To Equity share capital A/c   Dr.     To Securities Premium A/c (Being 1,600 equity share of Rs 100 each issued at the premium of 25% to debenture holders)		2,00,000	1,60,000 40,000

Number of shares to be issued = `"Amount Payable"/"Issue Price" = "2,00,000"/((100 - 25)) = 250000/125` = 1,600 share