Question

Agni Ltd. issued 10,000, 8% Debentures of ₹ 100 each payable as follows:

On Application	₹ 10	payable on 1st May, 2024
On Allotment	₹ 20	payable on 1st July, 2024
On First Call	₹ 30	payable on 1st October, 2024
On Second & Final Call	₹ 40	payable on 1st February, 2025

All the debentures were subscribed and allotted.

Debentureholder ‘A’, who was allotted 300 debentures, paid the amount of first and second & final calls with allotment. Another debenture holder, ‘B’, did not pay the first call on his 600 debentures, which he paid along with second & final call. 

As per Articles of Association, interest on calls-in-advance is to be allowed @ 10% p.a. whereas interest on calls-in-arrears is to be charged @ 8% p.a. 

Pass journal entries.

Answer 1

In the Books of Agni Ltd.
Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
2024
May 1	Bank A/c   ...Dr.		1,00,000	-
	To Debenture Application A/c		-	1,00,000
	(Application money received @ ₹10 per debenture on 10,000 debentures.)
May 1	Debenture Application A/c   ...Dr.		1,00,000	-
	To 8% Debentures A/c		-	1,00,000
	(Application money transferred on allotment.)
July 1	Debenture Allotment A/c   ...Dr.		2,00,000	-
	To 8% Debentures A/c		-	2,00,000
	(Being allotment money due on 10,000 debentures at ₹ 20 each)
July 1	Bank A/c   ...Dr.		2,21,000	-
	To Debenture Allotment A/c		-	2,00,000
	To Calls-in-Advance A/c (A: 300 × ₹70)		-	21,000
	(Allotment received, including calls-in-advance from A.)
October 1	Debenture First Call A/c    ...Dr.		3,00,000	-
	To 8% Debentures A/c		-	3,00,000
	(First call due @ ₹30 per debenture on 10,000 debentures.)
October 1	Bank A/c   ...Dr.		2,82,000	-
	Calls-in-Advance A/c  ...Dr.		9,000	-
	Calls-in-Arrears A/c  ...Dr.		18,000	-
	To Debenture First Call A/c		-	3,00,000
	(Being first call money received, adjusted for calls-in-advance on 300 debentures and calls-in-arrears on 600 debentures from 'B')
2025
February 1	Debenture Second & Final Call A/c   ...Dr.		4,00,000	-
	To 8% Debentures A/c		-	4,00,000
	(Second and Final call due @ ₹40 per debenture.)
February 1	Bank A/c   ...Dr.		3,88,000	-
	Calls-in-Advance A/c		12,000	-
	To Debenture Second & Final Call A/c		-	4,00,000
	(Being second & final call money received, adjusted for calls-in-advance on 300 debentures)
February 1	Bank A/c   ...Dr.		18,000	-
	To Calls-in-Arrears A/c		-	18,000
	(Being first call money received from ‘B’ on his 600 debentures)
March 31	Bank A/c   ...Dr.		480	-
	To Interest on Calls-in-Arrears A/c		-	480
	(Being interest on calls-in-arrears collected from ‘B’)
March 31	Interest on Calls-in-Advance A/c  ...Dr.		925	-
	To Bank A/c		-	925
	(Being interest on calls-in-advance paid to ‘A’)
March 31	Statement of Profit & Loss A/c  ...Dr.		445	-
	Interest on Calls-in-Arrears A/c  ...Dr.		480	-
	To Interest on Calls-in-Advance A/c		-	925
	(Being net interest transferred to Statement of Profit & Loss A/c)