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Question
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 |
Credit |
|
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) |
|
|
|
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