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Question
On 1.4.2015, MKM Ltd. issued 12,000, 11% debentures of `100 each at a discount of 8%, redeemable at a premium of 10% after three years. The company closes its books on 31st March every year. Interest on 11% debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.
Pass necessary journal entries for the issue of 11% debentures and debenture interest for the year ended 31.3.2016.
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Solution
| Journal | ||||
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
2015 Apr 1
|
Bank A/c (12,000 × Rs 92) Dr. To Debenture Application and Allotment A/c (Being received application money on 12,000 Debenture.) |
11,04,000
|
11,04,000 |
|
| Apr 1 |
Debenture Application and Allotment A/c Dr. Discount on Issued of Debentures A/c(12,000 × Rs 8) Dr. Loss on Issued of Debentures A/c (12,000 x Rs 10) To 11% Debentures A/c (12,000 x Rs 100) To Premium on Redemption of Debentures A/c (12,000 x Rs 10) (Being application money transferred to Debenture Account.) |
11,04,000 96,000 1,20,000
|
12,00,000 1,20,000
|
|
| Sep 30 |
Debenture Interest A/c (1200000 x Rs 11% x 6/12) Dr. To Debentures holder’s A/c To TDS Payable A/c (Being interest due.) |
66,000
|
59,400 6,600
|
|
| Sep 30 |
Debentures holder’s A/c Dr. TDS Payable A/c Dr. To Bank A/c (1200000 x Rs 11% x 6/12) (Being interest Paid.) |
59,400 6,600
|
66,000
|
|
|
2016 Mar 31
|
Debenture Interest A/c (1200000 x Rs 11% x 6/12) Dr. To Debentures holder’s A/c To TDS Payable A/c (Being interest due.) |
66,000
|
59,400 6,600
|
|
| Mar 31 |
Debentures holder’s A/c Dr. TDS Payable A/c To Bank A/c (1200000 x Rs 11% x 6/12) (Being interest Paid.) |
59,400 6,600
|
66,000
|
|
| Mar 31 |
Statement of Profit & Loss A/c Dr. To Bank A/c (1200000 x Rs 11%) (Being interest transferred to Profit & Loss Account.) |
1,32,000
|
1,32,000
|
|
RELATED QUESTIONS
On 1.4.2015, KVK Ltd. issued 15,000, 9% debentures of Rs 100 each at a discount of 7%, redeemable t a premium of 10% after 10 years. The company closes its books on 31st March every year. Interest on 9%debentures is payable on 30th September and 31st March every year. The rate of tax deducted at source is 10%.
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| Year | Rs |
| III | 10,00,000 |
| IV | 20,00,000 |
| V | 30,00,000 |
| VI | 40,00,000 |
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Answer in a sentence only.
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Select most appropriate alternative from those given below :
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- Pass entries for Interest on debentures on March 31, 2022 assuming interest is payable on 30 September and 31 March every year.
Pass journal entries relating to issue of debentures for the following transactions:
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- Issued 4,000, 12% debentures of ₹ 100 each at 10% premium, redeemable at 6% premium.
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- Issued ₹ 5,00,000, 9% debentures of ₹ 100 each at 10% premium redeemable at par.
- Issued ₹ 6,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at par.
Pass necessary journal entries for the issue of debentures in the following cases:
- Issued 50,000, 9% debentures of ₹ 100 each at par redeemable at par.
- Issued 10,000, 8% debentures of ₹ 100 each at 7% premium redeemable at par.
- Issued 750, 8% debentures of ₹ 100 each at 10% discount redeemable at par.
- Issued 1,000, 9% debentures of ₹ 100 each at 5% premium redeemable at 8% premium.
- Issued 500, 9% debentures of ₹ 100 each at 10% discount redeemable at 10% premium.
Pass necessary journal entries for the issue of debentures in the following cases :
- Issued ₹ 75,00,000, 9% debentures of ₹100 each at a premium of 10% redeemable at a premium of 5% after 3 years.
- Issued 8,000, 9% debentures of ₹100 each at a discount of 6% redeemable at a premium of 3% after 5 years.
- Issued 90,000, 9% debentures of ₹100 each at par, redeemable at par after 4 years.
Pass necessary journal entries for the issue of debentures in the following cases :
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- Issued 10,000, 12% debentures of ₹ 100 each at 10% discount redeemable at a premium of 5% after 5 years.
- Issued 75,000, 12% debentures of ₹ 100 each at par, redeemable at premium of 10% after three years.
Pass necessary journal entries for the issue of debentures in the following cases:
- Issued 5,000, 9% debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5% after 5 years.
- Issued 30,000, 12% debentures of ₹ 100 each at a premium of 5% and redeemable at par after 5 years.
- Issued 8,750, 12% debentures of ₹100 each at par, redeemable at par after 5 years.
Which of the following statement is incorrect with respect to debentures?
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Pass necessary journal entries in the books of Vimal Ltd. for the above transactions.
Chiranjeevi Limited issued 2,000, 10% debentures of ₹ 100 each. Pass the necessary Journal entries for the issue of debentures in the following cases:
- When debentures were issued at 10% premium, redeemable at 5% premium.
- When debentures were issued at 5% discount, redeemable at 10% premium.
- When debentures were issued at par, redeemable at a premium of 10%
On 1st April, 2023, Ruth Ltd. purchased Plant and Machinery for ₹ 11,00,000 from Pablo Ltd. payable as to ₹ 1,00,000 by accepting a promissory note and the balance by an issue of 11% Debentures of ₹ 100 each at a premium of 10% to be redeemed at a premium of 2 % after six years. You are required to pass journal entries in the books of Ruth Ltd. only to record the payment made to Pablo Ltd.
