Pass necessary journal entries in the following cases :
i. Z Ltd redeemed 1500, 12% debentures of Rs.100 each issued at a discount of 6% by converting them into equity shares of Rs.100 each issued at a premium of Rs.25 per share.
ii. X Ltd. converted 1,000, 12% debentures of Rs.100 each issued at a discount of Rs.10 per debenture into equity shares of Rs.100 each Rs.90 paid up.
Solution
Z Ltd.
Journal
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|
12% Debenture A/c Dr To Debenture holder A/c To Discount on issue of debenture A/c (Being 1,500 12% debenture of Rs.100 each issue at a discount of 6% due for redemption)
Debenture A/c Dr To Equity share capital A/c To Securities premium A/c (1,128 equity share of Rs.100 each issued at premium of 25% debenture holders) |
1,50,000
1,41,000
|
1,41,000 9,000
1,12,800 28,200
|
Working Note:
`"Number of share to be issued =""Amount Payable"/"Issue Price"=141000/125=1128" Shares"`
X Ltd.
Journal
| Date | Particulars | L.F. | Debit (Rs.) | Credit (Rs.) |
|
12% Debenture A/c Dr To Debenture holder A/c To Discount on issue of debenture A/c (Being 1,000 12% debenture of Rs.100 each issue at a discount of 6% due for redemption)
Debenture A/c Dr Discount on issue A/c Dr To Equity share capital A/c (1,000 equity share of Rs.100 each issued at premium of 10 debenture holders) |
1,00,000
90,000 10,000
|
90,000 10,000
1,00,000
|
Working Note:
`"Number of share to be issued =""Amount Payable"/"Issue Price"=90000/(100-10)=90000/90=1000" Shares"`
