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Question
On 1-4-2015 V.V.L. Ltd issued 1000, 9% debentures of Rs 100 each at a discount of 6%, redeemable at a premium of 10% after three years.
Pass necessary journal entries for the issue of debentures and debentures interest for the year ended 31-3-2016, assuming that interest is payable on 30th September and 31st March and the rate of tax deducted at source is 10%. The company closes its books on 31st March every year.
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Solution
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Journal |
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|
Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
|
|
Apr.01 |
Bank A/c (1,000 × 94) |
Dr. |
|
94,000 |
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
94,000 |
|
|
(Received application money on 1,000 Debenture) |
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|
|
|
|
|
|
|
|
|
|
|
Apr.01 |
Debenture Application and Allotment A/c |
Dr. |
|
94,000 |
|
|
|
Discount on Issue of Debenture A/c (1,000 ×6) |
Dr. |
|
6,000 |
|
|
|
Loss on Issue of Debenture A/c (1,000 × 10) |
Dr. |
|
10,000 |
|
|
|
To 9% Debentures A/c (1,000 × 100) |
|
|
|
1,00,000 |
|
|
To Premium on Redemption of Debentures A/c A/c (1,000 × 10) |
|
|
|
10,000 |
|
|
(Application money transferred to Debentures A/c) |
|
|
|
|
|
|
|
|
|
|
|
|
Sep.30 |
Debentures Interest A/c |
Dr. |
|
4,500 |
|
|
|
To Debentureholders’ A/c |
|
|
|
4,050 |
|
|
To TDS Payable A/c |
|
|
|
450 |
|
|
(Interest due) |
|
|
|
|
|
|
|
|
|
|
|
|
Sep.30 |
Debentureholders’ A/c |
Dr. |
|
4,050 |
|
|
|
TDS Payable A/c |
Dr. |
|
450 |
|
|
|
To Bank A/c |
|
|
|
4,500 |
|
|
(Interest paid) |
|
|
|
|
|
|
|
|
|
|
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|
2016 |
|
|
|
|
|
|
Mar .31 |
Debenture Interest A/c |
|
|
4,500 |
|
|
|
To Debentureholders’ A/c |
|
|
|
4,050 |
|
|
To TDS Payable A/c |
|
|
|
450 |
|
|
(Interest due) |
|
|
|
|
|
|
|
|
|
|
|
|
Mar.31 |
Debentureholders’ A/c |
Dr. |
|
4,050 |
|
|
|
TDS Payable A/c |
Dr. |
|
450 |
|
|
|
To Bank A/c |
|
|
4,500 |
|
|
|
(Interest paid) |
|
|
|
|
|
|
|
|
|
|
|
|
Mar.31 |
Statement of Profit & Loss A/c |
Dr. |
|
9,000 |
|
|
|
To Debentures Interest A/c |
|
|
9,000 |
|
|
|
(Interest transferred to P&L) |
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