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Question
Pass the necessary journal entries for the issue and redemption of Debentures in the following cases:
(i) 15,000, 9% Debentures of Rs 250 each issued at 5% premium, repayable at 15% premium.
(ii) 2,00,000, 12% Debentures of Rs 10 each issued at 8% premium, repayable at par.
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Solution
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Journal |
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|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
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|
(i) |
For Issue of Debentures |
|
|
|
|
|
|
Bank A/c |
Dr. |
|
39,37,500 |
|
|
|
To Debentures Application A/c |
|
|
39,37,500 |
|
|
|
(Debenture Application money received for 15,000 9% Debentures of Rs 250 each with premium of Rs 12.5 per debentures) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debentures Application A/c |
Dr. |
|
39,37,500 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
5,62,500 |
|
|
|
To 9% Debentures A/c |
|
|
37,50,000 |
|
|
|
To Securities Premium A/c |
|
|
1,87,500 |
|
|
|
To Premium on Redemption of Debentures A/c |
|
|
5,62,500 |
|
|
|
(15,000 9% Debentures of 250 each issued at a premium of 5% which are to repaid at 15% premium) |
|
|
|
|
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|
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At the time of Redemption |
|
|
|
|
|
|
9% Debentures A/c |
Dr. |
|
37,50,000 |
|
|
|
Premium on Redemption of Debentures A/c |
Dr. |
|
5,62,500 |
|
|
|
To Debentureholders’ A/c |
|
|
43,12,500 |
|
|
|
(15,000 9% Debentures due for redemption) |
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|
|
|
|
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|
|
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|
Debentureholders’ A/c |
Dr. |
|
43,12,500 |
|
|
|
To Bank A/c |
|
|
43,12,500 |
|
|
|
(Payment of debentures made to debentureholders) |
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|
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(ii) |
For Issue of Debentures |
|
|
|
|
|
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Bank A/c |
Dr. |
|
21,60,000 |
|
|
|
To Debenture Application A/c |
|
|
21,60,000 |
|
|
|
(Application money received for 2,00,000 12% Debentures at Rs 10 each at 8% premium) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
21,60,000 |
|
|
|
To 12% Debentures A/c |
|
|
20,00,000 |
|
|
|
To Securities Premium A/c |
|
|
1,80,000 |
|
|
|
(2,00,000 12% Debentures of Rs 10 each issued at premium of 8%) |
|
|
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For Redemption of Debentures |
|
|
|
|
|
|
12% Debentures A/c |
Dr. |
|
20,00,000 |
|
|
|
To Debenturesholders’ A/c |
|
|
20,00,000 |
|
|
|
(2,00,000 12% Debentures of Rs 10 each due for redemption) |
|
|
|
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|
|
|
|
|
|
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Debentureholders’ A/c |
Dr. |
|
20,00,000 |
|
|
|
To Bank A/c |
|
|
20,00,000 |
|
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|
(Payment made to Debenturesholders) |
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