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On 1st April, 2015, V.V.L.Ltd Issued 1,000, 9% Debentures of ₹ 100 Each at a Discount of 6%, Redeemable at a Premium of 10% After Three Years. - Accountancy

Journal Entry

On 1st April, 2015, V.V.L.Ltd issued 1,000, 9% Debentures of  ₹ 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 debenture interest for the year ended 31st March, 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

                                                       Journal

 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)

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 2
Chapter 2 Issue of Debentures
Exercise | Q 42 | Page 56
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