Question

Pass necessary Journal entries relating to the issue of  debentures for the following:
(a) Issued  ₹ 28,000; 10% Debentures of  ₹ 100 each at a premium of 15% redeemable at par.
(b) Issued  ₹ 30,000; 10% Debentures of  ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
(c) Issued  ₹ 80,000; 10% Debentures of  ₹ 100 each at par repayable at a premium of 10%.

Answer 1

Journal

Date	Particulars		L.F.	Debit Amount Rs	Credit  Amount Rs
(a)	Bank A/c (280 debentures × 115)	Dr.		32,200
	To Debenture Application and Allotment A/c				32,200
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		32,200
	To 10% Debentures A/c				28,000
	To Securities Premium Reserve A/c				4,200
	(280; 10% Debentures issued at a premium of 15%)
(b)	Bank A/c	Dr.		33,000
	To Debenture Application and Allotment A/c				33,000
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		33,000
	Loss On Issue of debentures A/c	Dr.		4,500
	To 10% Debentures A/c				30,000
	To Securities Premium Reserve A/c				3,000
	To Premium on Redemption of debentures A/c				4,500
	(300; 10% Debentures issued at a premium of 10% and redeemable at a premium of 15%)
(c)	Bank A/c	Dr.		80,000
	To Debenture Application and Allotment A/c				80,000
	(Application money received)
	Debenture Application and Allotment A/c	Dr.		80,000
	Loss On Issue of debentures A/c	Dr.		8,000
	To 10% Debentures A/c				80,000
	To Premium on Redemption of debentures A/c				8,000
	(800; 10% Debentures issued at par and redeemable at premium of 10%)