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Question
Narain Laxmi Ltd. invited applications for issuing 7500, 12% Debentures of Rs100 each at a premium of Rs 35 per Debenture. The full amount was payable on application.
Applications were received for 10,000 Debentures. Applications for 2500 Debentures were rejected and the application money was refunded. Debentures were allotted to the remaining applicants.
Pass necessary Journal Entries for the above transactions in the books of Narain Laxmi Ltd.
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Solution
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Books of Narian Laxmi Ltd.
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|||||
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Date |
Particulars |
|
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Bank A/c To Debenture Application A/c (Debenture application money received for 10,000 Debentures at Rs 135 per debenture )
Debenture Application A/c To 12% Debenture A/c To Securities Premium A/c (Debenture application money on 7,500 debentures transferred to 12% Debenture and Securities Premium)
Debenture Application A/c To Bank A/c (2500 12% Debenture application money returned) |
Dr.
Dr.
Dr. |
|
13,50,000
10,12,500
3,37,500 |
13,50,000
7,50,000 2,62,500
3,37,500 |
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