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On 1st April, 2023, Zara Ltd. issued 10,000, 6% Debentures of ₹ 100 each at a discount of 5%. On 31st March, 2024, the company had ₹ 40,000 in its Capital Reserve A/c - Accounts

Question

On 1st April, 2023, Zara Ltd. issued 10,000, 6% Debentures of ₹ 100 each at a discount of 5%. On 31st March, 2024, the company had ₹ 40,000 in its Capital Reserve A/c and ₹ 30,000 as balance of Securities Premium.

Give the journal entry to write off the discount on the issue of debentures on 31st March, 2024.

Journal Entry

Solution

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Securities Premium A/c ...Dr.		30,000	-
	Statement of P/L ...Dr.		20,000	-
	To Discount on issue of Debentures A/c		-	50,000