Question

X Ltd invited applications for issuing 500, 12 % debentures of `100 each at a discount of 5%. These debentures were redeemable after these years at par. Applications for 600 debentures were received. Prorata allotment was made to all the applications.
Pass necessary journal entries for the issue of debentures assuming that the whole amount was payable with application.

Answer 1

Journal
Date	Particulars	L.F.	Dr. Rs	Cr. Rs
	Bank A/c            Dr.         To Debenture Application and Allotment A/c (Being application and Allotment Money received on 600 Debentures) Debenture Application & Allotment A/c  Dr Discount on Issue of Debentures A/c    Dr      To 12% Debentures A/c       To Bank A/c (Being application and Allotment Money transferred to Debentures Account)		57,000     57,000 2,500	57,000       50,000 9,500