Advertisements
Advertisements
Question
Nikki Ltd. issued 10,000, 7% Debentures of ₹ 100 each at premium of ₹ 20 per debenture. Issue price was payable as follows: ₹ 40 on application, ₹ 50 (including premium) on allotment and balance on first and final call. It received ₹ 4,00,000 as application money. On allotment due amount was received. First and final call is yet to be made.
You are required to pass the necessary Journal entries.
Journal Entry
Advertisements
Solution
| Journal Entries In the Books of Nikki Ltd. |
||||
|---|---|---|---|---|
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
| 1. | Bank A/c ...Dr. | 4,00,000 | ||
| To Debentures Application A/c | 4,00,000 | |||
| (Application money received on 10,000 debentures) | ||||
| 2. | Debentures Application A/c ...Dr. | 4,00,000 | ||
| To 7% Debentures A/c | 4,00,000 | |||
| (Application money transferred to Debentures A/c) | ||||
| 3. | Debentures Allotment A/c ...Dr. | 5,00,000 | ||
| To 7% Debentures A/c | 3,00,000 | |||
| To Securities Premium A/c | 2,00,000 | |||
| (Allotment money due @ ₹ 50 per debenture, including premium of ₹ 20) | ||||
| 4. | Bank A/c ...Dr. | 5,00,000 | ||
| To Debentures Allotment A/c | 5,00,000 | |||
| (Allotment money received) | ||||
Working Notes:
Face value of debentures:
10,000 × ₹ 100 = ₹10,00,000
Premium:
10,000 × ₹ 20 = ₹ 2,00,000
Application Money:
10,000 × ₹ 40 = ₹ 4,00,000
Allotment Money: ₹ 50 per debenture, including premium of ₹ 20
10,000 × ₹ 50 = ₹ 5,00,000
Out of ₹ 50:
₹ 30 towards Debentures + ₹ 20 Premium
First and Final Call:
₹ 100 − ₹ 40 − ₹ 30 = ₹ 30 per debenture
shaalaa.com
Is there an error in this question or solution?
