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Question
Pass necessary Journal entries relating to the issue of debentures for the following:
(a) Issued ₹ 28,000; 10% Debentures of ₹ 100 each at a premium of 15% redeemable at par.
(b) Issued ₹ 30,000; 10% Debentures of ₹ 100 each at a premium of 10% and redeemable at a premium of 15%.
(c) Issued ₹ 80,000; 10% Debentures of ₹ 100 each at par repayable at a premium of 10%.
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Solution
Journal
|
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
(a) |
Bank A/c (280 debentures × 115) |
Dr. |
|
32,200 |
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
32,200 |
|
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application and Allotment A/c |
Dr. |
|
32,200 |
|
|
|
To 10% Debentures A/c |
|
|
|
28,000 |
|
|
To Securities Premium Reserve A/c |
|
|
|
4,200 |
|
|
(280; 10% Debentures issued at a premium of 15%) |
|
|
|
|
|
|
|
|
|
|
|
|
(b) |
Bank A/c |
Dr. |
|
33,000 |
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
33,000 |
|
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application and Allotment A/c |
Dr. |
|
33,000 |
|
|
|
Loss On Issue of debentures A/c |
Dr. |
|
4,500 |
|
|
|
To 10% Debentures A/c |
|
|
|
30,000 |
|
|
To Securities Premium Reserve A/c |
|
|
|
3,000 |
|
|
To Premium on Redemption of debentures A/c |
|
|
|
4,500 |
|
|
(300; 10% Debentures issued at a premium of 10% and redeemable at a premium of 15%) |
|
|
|
|
|
|
|
|
|
|
|
|
(c) |
Bank A/c |
Dr. |
|
80,000 |
|
|
|
To Debenture Application and Allotment A/c |
|
|
|
80,000 |
|
|
(Application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application and Allotment A/c |
Dr. |
|
80,000 |
|
|
|
Loss On Issue of debentures A/c |
Dr. |
|
8,000 |
|
|
|
To 10% Debentures A/c |
|
|
|
80,000 |
|
|
To Premium on Redemption of debentures A/c |
|
|
|
8,000 |
|
|
(800; 10% Debentures issued at par and redeemable at premium of 10%) |
|
|
|
|
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Explain the different terms for the issue of debentures with reference to their redemption.
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