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Question
Tanagi Ltd. issued Rs 10,000 12% debentures of Rs 100 each at a discount of 5% Payable as follows:
On Application Rs 40
On Allotment Rs 55
Show journal entries assuming that all the installments were duly collected. Also show the relevant portion of the balance sheet.
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Solution
Books of Tanagi Ltd.
Journal Entry
| Date | Particulars | L.F. | Debit Amount (Rs.) | Credit Amount (Rs.) |
| Bank A/c Dr. To Debenture Application A/c (Debenture application received on 10,000 12% Debentures of Rs 40 each) |
400,000 | 400,000 | ||
| Debenture Application A/c Dr. To 12% Debentures A/c (Debenture application money transferred to 12% Debenture A/c) |
400,000 | 400,000 | ||
|
Debenture Allotment A/c Dr. |
550,000 50,000 |
600,000 | ||
| Bank A/c Dr. To Debenture Allotment A/c (Debenture Allotment received on 10,000, 12% Debentures of Rs 55 each) |
550,000 | 550,000 |
Balance Sheet of Tanaji Ltd.
| Liabilities | Amount (Rs.) | Assets | Amount (Rs.) |
| Secured loans : 12% Debentures |
10,00,000 | Cash at Bank | 9,50,000 |
| Miscellaneous Exp. - Discount on Issue of Debentures | 50,000 | ||
| 10,00,000 | 10,00,000 | ||
Working Notes :
Face value of Debenture = Rs. 100
Discount ( 100 x 5% ) = Rs. 5
∴ Issue Price = Rs.95
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Answer in a sentence only.
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Write one word/term/phrase which can substitute the following
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