# Record Necessary Journal Entries Assuming that Income Tax is Deducted at 30% of the Amount of Interest. - Book Keeping and Accountancy

Journal Entry

Dinesh Ltd. Issued 10,00,000 6% Debentures on 1st April, 2010. Interest is paid on 30 sept., 2010 and 31st March, 2011.
Record necessary journal entries assuming that income tax is deducted at 30% of the amount of interest.

#### Solution

Books of Dinesh Ltd.
Journal Entry

 Date Particulars L.F. Debit Amount (Rs.) Credit Amount (Rs.) 2010Apr.01 Bank A/c                               Dr. To Debenture Application and Allotment A/c(Debenture application and Allotment received on 10,000 6% Debentures of Rs 100 each) 10,00,000 10,00,000 Apr.01 Debenture Application and Allotment A/c                Dr. To 6% Debentures A/c(Debenture application and allotment transferred to 6% Debenture A/c) 10,00,000 10,00,000 Sept.30 Debenture Interest A/c    Dr. To Income Tax Payable A/c To Debentureholders A/c(Amount of interest due on debenture and TDS 30,000 9,00021,000 Sept.30 Debentureholders A/c      Dr   To Bank A/c(Interest paid to Debenture holder) 21,000 21,000 2011Mar.31 Debenture Interest A/c          Dr.  To Income Tax Payable A/c  To Debentureholders A/c(Amount due on Debenture and TDS) 30,000 9,00021,000 Mar.31 Debentureholders A/c     Dr.     To Bank A/c(Interest paid to Debenture Holder) 21,000 21,000 Mar.31 Income Tax Payable A/c   Dr.     To Bank A/c (Income Tax paid) 18,000 18,000 Mar.31 Profit and Loss A/c             Dr.    To Debenture Interest A/c(Interest on Debenture transferred to Profit and Loss A/c) 60,000 60,000
Concept: Interest on Debentures
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#### APPEARS IN

Micheal Vaz Accounts - Book Keeping and Accountancy HSC 12th Standard Maharashtra State Board
Chapter 11 Company Accounts Part - 2 (Accounting for Debentures)
Exercise | Q 5 | Page 374