Question

Pass necessary journal entries for the issue of debentures for the following transaction:

Naro Ltd. issued 50,000, 10% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%.

Answer 1

In the Books of Naro Ltd. Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Bank A/с   ...Dr.		52,50,000	−
	To 10% Debenture Application and Allotment A/c		−	52,50,000
	(Being application money received on 50,000 debentures @ ₹105 each)
	10% Debenture Application and Allotment A/c   ...Dr.		52,50,000	−
	Loss on Issue of Debentures A/c   ...Dr.		5,00,000	−
	To 10% Debentures A/c		−	50,00,000
	To Securities Premium A/c		−	2,50,000
	To Premium on Redemption of Debentures A/c		−	5,00,000
	(Being application money transferred to debentures account, issued at a premium of 5%, but redeemable at a premium of 10%.)