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Question
Office Products Ltd, issued on 1st April, 2018, 20,000, 9% Debentures of ₹ 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Pass the necessary Journal entries.
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Solution
In the books of Office Products Ltd.
Journal
|
Date |
Particulars |
|
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
2018 |
|
|
|
||
|
April 01 |
Bank A/c |
Dr. |
22,00,000 |
|
|
|
|
To Debentures Application and Allotment A/c |
|
|
22,00,000 |
|
|
|
(Being application money received on 20,000 debentures) |
|
|
|
|
|
|
|
|
|
||
|
April 01 |
Debentures Application and Allotment A/c |
Dr. |
22,00,000 |
|
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
1,00,000 |
|
|
|
|
To 9% Debentures A/c |
|
|
20,00,000 |
|
|
|
To Securities Premium Reserve A/c |
|
|
2,00,000 |
|
|
|
To Premium on Redemption of Debentures A/c |
|
|
1,00,000 |
|
|
|
(Being application and allotment money adjusted and 5% premium on redemption of debentures too) |
|
|
|
|
|
|
|
|
|
||
|
2019 |
|
|
|
||
|
March 31 |
Securities Premium Reserve A/c |
Dr. |
1,00,000 |
|
|
|
|
To Loss on Issue of Debentures A/c |
|
|
1,00,000 |
|
|
|
(Being loss on issue of debentures written off) |
|
|
|
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