Question

Pass the necessary journal entries for 'Issue of Debenture' for the following:

1. Arman Ltd. issued 750, 12% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5%.
2. Sohan Ltd. issued 800, 9% Debentures of ₹ 100 each at a premium of 20 per debenture redeemable at a premium of ₹ 10 per Debenture.

Answer 1

Journal Entries
Date	Particulars	Debit	Credit
(i)	Bank A/c     ...Dr.	67,500
	To Debenture Application and allotment A/c		67,500
	(Being applications received)
	Debenture Application and allotment A/c     ...Dr.	67,500
	Loss on issue of Debentures A/c     ...Dr.	11,250
	To 12% Debentures A/c		75,000
	To Premium redemption of debentures A/c		3,750
	(Being Debentures issued at a discount redeemable at a premium)
(ii)	Bank A/c     ...Dr.	96,000
	To Debenture Application and allotment A/c		96,000
	(Being applications received)
	Debenture Application and allotment A/c     ...Dr.	96,000
	Loss on issue of Debentures A/c     ...Dr.	8,000
	To 12% Debentures A/c		80,000
	To Securities Premium A/c		16,000
	To Premium on Redemption A/c		8,000
	(Being Debentures issued at a discount redeemable at a premium)