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On 1st January, 2017, Raha Ltd. Issued 6,000, 8% Debentures of Nominal (Face) Value of ₹ 100 Each - Accountancy

Journal Entry

On 1st January, 2017, Raha Ltd. issued 6,000, 8% Debentures of nominal (face) value of ₹ 100 each redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years. It has a balance of ₹ 10,000 in Securities Premium Reserve.
Pass Journal entries. Also give Journal entries for writing off Loss on Issue of Debentures.

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Solution

In the books of Raha Ltd.
Journal

Date

Particulars

 

L.F.

Debit
Amount
(₹)

Credit
Amount
(₹)

2017

 

 

 

 

 

January 01

Bank A/c (6,000 × 100)

Dr.

 

6,00,000

 

 

  To Debentures Application & Allotment A/c (6,000 × 100)

 

 

 

6,00,000

 

(Being application money received on 8% Debentures issued)

 

 

 

 

 

 

 

 

 

 

January 01

Debentures Application & Allotment A/c

Dr.

 

6,00,000

 

 

Loss on Issue of Debentures A/c

Dr.

 

30,000

 

 

  To 8% Debentures A/c

 

 

 

6,00,000

 

  To Premium on Redemption of Debentures A/c

 

 

 

30,000

 

(Being application & allotment money adjusted along with 5%

 

 

 

 

 

premium payable on redemption)

 

 

 

 

2017

 

 

 

 

 

 December 31 Securities Premium Reserve A/c

Dr.

 

10,000

 

  Statement of Profit & Loss A/c

Dr.

 

20,000

 

 

  To Loss on Issue of Debentures A/c

 

 

 

30,000

 

(Being loss on issue of debentures written off)

 

 

 

 

  Is there an error in this question or solution?
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 2
Chapter 2 Issue of Debentures
Exercise | Q 45 | Page 56
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