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On 2.3.2016 L and B Ltd. Issued 635, 9% Debentures of Rs.500 Each. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations - CBSE (Arts) Class 12 - Accountancy

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Question

On 2.3.2016 L and B Ltd. issued 635, 9% debentures of Rs.500 each. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at 5% discount, redeemable at 10% premium.

(b) When debentures were issued at 12% premium, redeemable at 6% premium.

Solution

                                                                                      Journal

Date Particulars L.F. Dr.(Rs.) Cr.(Rs.)

(a)

 

 

 

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

 

 

Bank A/c (635 x Rs.475)                                                                         Dr

             To Debenture Application A/c

(Being debenture application money received)

 

Debenture Application A/c                                                                       Dr

Loss on Issue of Debentures A/c (635 x Rs.75)                                         Dr

                To 9% Debentures A/c

                To Premium on Redemption of Debentures A/c (635 x Rs.50)

(Being debentures issued at par, redeemable at premium)

 

Bank A/c (635 x Rs.560)                                                                         Dr

                To Debenture Application A/c

(Being debenture application money received)

 

Debenture Application A/c                                                                       Dr

Loss on Issue of Debenture A/c (635 x Rs.30)                                           Dr

                 To 9% Debentures A/c

                 To Premium on Redemption of Debenture A/c (365 x Rs.30)

                 To Securities Premium A/c (635 x Rs.60)

(Being debenture issued at discount redeemable at a premium)

 

3,01,625

 

 

 

3,01,625

47,625

 

 

 

 

3,55,600

 

 

 

3,55,600

19,050

 

 

 

 

 

3,01,625

 

 

 

 

3,17,500

31,750

 

 

 

3,55,600

 

 

 

 

3,17,500

19,050

38,100

 

  Is there an error in this question or solution?

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Solution On 2.3.2016 L and B Ltd. Issued 635, 9% Debentures of Rs.500 Each. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations Concept: Issue of Debentures with Terms of Redemption.
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