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Pass Necessary Journal Entries in the Following Cases Jay Ltd. Redeemed 1,500, 12% Debentures of Rs 1,000 Each Issued at a Discount of 10% by Converting Them into Equity Shares of `50 Each Issued at Par. - Accountancy

Pass necessary journal entries in the following cases

Jay Ltd. redeemed 1,500, 12% debentures of Rs 1,000 each issued at a discount of 10% by converting them into equity shares of Rs 50 each issued at par.

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Solution

Books of Jay Ltd.
Journal Entry
Date Particulars L.F

Dr.

Rs

Cr.

Rs

 

12% Debenture A/c         Dr.

      To Debenture holder A/c

      To Discount on issue of Debentures A/c

(Being 1,500 12% debenture of  Rs 100 each(issued at discount of 10%) due for redemption)

 

15,00,000

 

 

 

 

 

13,50,000

1,50,000

 

 

 

Debenture holder A/c               Dr.

     To Equity share capital A/c

(Being payment made to debenture holder by issuing Rs 27,000 equity share of Rs 50 each)

 

13,50,000

 

 

 

 

13,50,000

 

 

Working Note:

Number of shares to be issued = `" Amount Payable to Debentureholder"/"Price of a Share"`

Number of shares to be issued  = 1350000/50 = 27000 share

  Is there an error in this question or solution?
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