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On 1.4.2015, Kvk Ltd. Issued 15,000, 9% Debentures of Rs 100 Each at a Discount of 7%, Redeemable T a Premium of 10% After 10 Years Pass Necessary Journal Entries for the Issue of 9% Debentures and Debenture Interest for the Year Ended 31.3.2016 - CBSE (Arts) Class 12 - Accountancy

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Question

On 1.4.2015, KVK Ltd. issued 15,000, 9% debentures of Rs 100 each at a discount of 7%, redeemable t a premium of 10% after 10 years. The company closes its books on 31st March every year. Interest on 9%debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.

Pass necessary journal entries for the issue of 9% debentures and debenture interest for the year ended 31.3.2016.

Solution

Journal
Date Particulars L.F

Dr.

Rs

Cr.

Rs

2015

Apr 1

 

 

 

Bank A/c (15,000 × Rs 93)    Dr

    To Debenture Application and Allotment A/c

(Being received application money on 15,000 Debenture.)

 

 

13,95,000

 

 

 

 

13,95,000

 

Apr 1

 

 

 

 

Debenture Application and Allotment A/c     Dr

Discount on Issued of Debentures A/c(15,000 × Rs 7)  Dr

Loss on Issued of Debentures A/c (15,000 x Rs 10)

    To 9% Debentures A/c (15,000 x Rs 100)

    To Premium on Redemption of Debentures A/c (15,000x Rs10)

(Being application money transferred to Debenture Account.)

 

13,95,000

1,05,000

1,50,000

 

 

 

 

 

 

15,00,000

1,50,000

 

Sep 30

 

 

 

Debenture Interest A/c (1500000 x 9% x 6/12)    Dr

    To Debentures holder’s A/c

    To TDS Payable A/c

(Being interest due.)

 

67,500

 

 

 

 

60,750

6,750

 

Sep 30

 

 

 

Debentures holder’s A/c      Dr

TDS Payable A/c      Dr

     To Bank A/c (1500000 x 9% x 6/12)

(Being interest Paid.)

 

60,750

6,750

 

 

 

 

67,500

 

2016

Mar 31

 

 

 

 

Debenture Interest A/c (1500000 x 9% x 6/12)    Dr

   To Debentures holder’s A/c

   To TDS Payable A/c

(Being interest due.)

 

 

67,500

 

 

 

 

 

60,750

6,750

 

Mar 31

 

 

 

Debentures holder’s A/c     Dr.

TDS Payable A/c    Dr.

     To Bank A/c  (1500000 x 9% x 6/12)

(Being interest Paid.)

 

60,750

6,750

 

 

 

 

67,500

 

Mar 31

 

 

Statement of Profit & Loss A/c       Dr.

   To Bank A/c (15,00,000 x 9%)

(Being interest transferred to Profit & Loss Account.)

 

1,35,000

 

 

 

1,35,000

 

  Is there an error in this question or solution?

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Solution On 1.4.2015, Kvk Ltd. Issued 15,000, 9% Debentures of Rs 100 Each at a Discount of 7%, Redeemable T a Premium of 10% After 10 Years Pass Necessary Journal Entries for the Issue of 9% Debentures and Debenture Interest for the Year Ended 31.3.2016 Concept: Issue of Debentures at Par at Premium and at Discount.
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