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A Ltd . Issued 2,000; 9% Debentures of ₹ 100 Each on the Following Terms: ₹20 on Applications ;

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Question

A Ltd . issued 2,000; 9% Debentures of ₹ 100 each on the following terms:
₹20 on applications ;₹ 20 on allotment ; ₹ 30 on first call ; ₹ 30 on final call.
The public applied for 2,400 debentures. Applications for 1,800 debentures were accepted in full. Applications for 400 debentures were allotted 200 debentures  and applications for 200 debentures were rejected . Pass necessary Journal entries .  

Journal Entry
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Solution

Books of A Ltd.
Journal

Date

Particular

L.F.

Debit Amount

Rs

Credit Amount

Rs

 

Bank A/c

Dr.

 

48,000

 

 

To 9% Debenture Application A/c

 

 

48,000

 

(Debenture application money received for 2,400 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

9% Debenture Application A/c

Dr.

 

48,000

 

 

To 9% Debentures A/c

 

 

40,000

 

To 9% Debentures Allotment A/c

 

 

4,000

 

To Bank A/c

 

 

4,000

 

(Debenture application money transferred to 9% Debenture account for 2,000 Debenture, adjusted to Debenture Allotment account for 200 Debentures and money refunded for 200 debentures)

 

 

 

 

 

 

 

 

 

9% Debenture Allotment A/c

Dr.

 

40,000

 

 

To 9% Debentures A/c

 

 

40,000

 

(Debenture allotment money due on 2,000 debentures at Rs 20 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

36,000

 

 

To 9% Debentures Allotment A/c

 

 

36,000

 

(Debenture allotment money received)

 

 

 

 

 

 

 

 

 

Debenture First Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debenture first call money due on 2,000 9% debenture at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture First Call A/c

 

 

60,000

 

(Debenture first call money received)

 

 

 

 

 

 

 

 

 

Debenture Final Call A/c

Dr.

 

60,000

 

 

To 9% Debentures A/c

 

 

60,000

 

(Debentures final call money due on 2,000 9% Debentures at Rs 30 each)

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

60,000

 

 

To Debenture Final Call A/c

 

 

60,000

 

(Debenture final call received on 2,000 9% Debenture at Rs 30 each)

 

 

 

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Chapter 9: Issue of Debentures - Exercise [Page 51]

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