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Question
Nipa Limited issued ₹ 10,00,000 Debentures of ₹ 100 each at a premium of 10% , payable 25% on application (including premium) and the balance on allotment . The debentures were applied for and the amount was dully received.
You are required to give Journal entries and prepare Cash Book.
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Solution
Face Value of Debenture = Rs 100
Premium (Rs 100 × 10%) = Rs 10
∴ Issue Price = Rs 110
Amount Payable as:
|
On Application (25%) |
Rs 25 including premium of Rs 10 (i.e. Rs 10 + 15) |
|
On Allotment (85%) |
Rs 85 per debenture |
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
Debenture Application A/c |
Dr. |
|
2,50,000 |
|
|
|
To Debentures A/c |
|
|
1,50,000 |
|
|
|
To Securities Premium A/c |
|
|
1,00,000 |
|
|
|
(Debenture application money received for 10,000 debentures at Rs 25 including premium of Rs10 each transferred to debenture account) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Allotment A/c |
Dr. |
|
8,50,000 |
|
|
|
To Debentures A/c |
|
|
8,50,000 |
|
|
|
(Debentures allotment due on 10,000 Debentures at Rs 85 each) |
|
|
|
|
Cash Book
Dr. Cr.
|
Date |
Particulars |
L.F. |
Bank Rs |
Date |
Particulars |
L.F. |
Bank Rs |
|
|
Debenture Application |
|
2,50,000 |
|
|
|
|
|
|
Debenture Allotment |
|
8,50,000 |
|
|
|
|
|
|
Balance c/d |
|
11,00,000 |
||||
|
11,00,000 |
11,00,000 |
||||||
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