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Question
B. Ltd. issued 1,000, 12% debentures of Rs 100 each on April 01, 2014, at a discount of 5% redeemable at a premium of 10%.
Give journal entries relating to the issue of debentures and debenture interest for the period ending March 31, 2015, assuming that interest is paid half-yearly on September 30 and March 31, and tax deducted at source is 10%.
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Solution
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
||||
|
2014 |
|
|
|
|
|
|||
|
Apr. 01 |
Bank A/c |
Dr. |
|
95,000 |
|
|||
|
|
Loss on Issue on Debentures A/c |
Dr. |
|
15,000 |
|
|||
|
|
|
To 12% Debenture A/c |
|
|
1,00,000 |
|||
|
|
|
To Premium on Redemption of Debentures A/c |
|
|
10,000 |
|||
|
|
(Debenture issued at discount and redeemable at Premium) |
|
|
|
||||
|
Sept. 30 |
Debenture Interest A/c |
Dr. |
|
6,000 |
|
|||
|
|
|
To Income Tax Payable A/c |
|
|
600 |
|||
|
|
|
To Debenture Holders A/c |
|
|
5,400 |
|||
|
|
(Amount of interest on 12% debentures Rs 1,00,000 due for 6 months and 10% tax deducted at source) |
|
|
|
||||
|
Sept. 30 |
Debenture Holders A/c |
Dr. |
|
5,400 |
|
|||
|
|
|
To Bank A/c |
|
|
5,400 |
|||
|
|
(Interest paid to Debenture Holders) |
|
|
|
||||
|
2015 |
Debenture Interest A/c |
Dr. |
|
6,000 |
|
|||
|
|
|
To Income Tax Payable A/c |
|
|
600 |
|||
|
|
|
To Debenture Holders A/c |
|
|
5,400 |
|||
|
|
(Amount of interest on 12% Debentures Rs 1,00,000 due for 6 months and 10% tax deducted at source) |
|
|
|
||||
|
Mar. 31 |
Debenture Holders A/c |
Dr. |
|
|
5,400 |
|||
|
|
|
To Bank A/c |
|
|
5,400 |
|||
|
|
(Interest paid to Debenture Holders) |
|
|
|
||||
|
Mar. 31 |
Profit and Loss A/c |
Dr. |
|
12,000 |
|
|||
|
|
|
To Debenture Interest A/c |
|
|
12,000 |
|||
|
|
(Interest on debentures transferred to Profit and Loss Account) |
|
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