Question

KTR Ltd., issued 365, 9% Debentures of `1,000 each on 4-3-2016. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at par redeemable at a premium of 10%.

(b) When debentures were issued at 6% discount redeemable at 5% premium.

Answer 1

                                                                                     Journal

Date	Particulars	L.F.	Dr. (Rs.)	Cr. (Rs.)
(a)                   (b)	Bank A/c (365 x Rs.1000)                                                                               Dr                To Debenture Application A/c (Being debenture application money received)   Debenture Application A/c                                                                               Dr Loss on Issue of Debentures A/c (365 x Rs.100)                                                Dr            To 9% Debentures A/c            To Premium on Redemption of Debentures A/c (365 x Rs.100) (Being debentures issued at par, redeemable at premium)   Bank A/c (365 x Rs.940)                                                                                 Dr               To Debenture Application A/c (Being debenture application money received)   Debenture Application A/c                                                                               Dr Loss on Issue of Debenture A/c (365 x Rs.110)                                                  Dr                 To 9% Debentures A/c                 To Premium on Redemption of Debenture A/c (365 x Rs.50) (Being debenture issued at discount redeemable at a premium)		3,65,000       3,65,000 36,500         3,43,100        3,43,100  40,150	3,65,000         3,65,000 36,500       3,43,100            3,65,000  18,250