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Trk Ltd. Issued 767, 9% Debentures of Rs.100 Each on 1-1-2016. Pass Necessary Journal Entries for the Issue of Debentures in the Following Situations - Accountancy

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TRK Ltd. issued 767, 9% debentures of Rs.100 each on 1-1-2016. Pass necessary journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at a discount of 3% and were redeemable at a premium of 7%.

(b) When debentures were issued at a premium of 4% and were redeemable at a premium of 9%.

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Solution

                                                               Journal

Date Particulars L.F. Dr. (Rs) Cr. (Rs)

(a)

 

 

 

 

 

 

 

 

 

(b)

Bank A/c (767 x Rs.97)                                                                    Dr

            To Debenture Application A/c

(Being debenture application money received)

 

Debenture Application A/c                                                                 Dr

Loss on Issue of Debentures A/c (767 x Rs.10)                                   Dr

               To 9% Debentures A/c

               To Premium on Redemption of Debentures A/c (767 x Rs.7)

(Being debentures issued at discount, redeemable at premium)

 

Bank A/c (767 x Rs.104)                                                                   Dr

                To Debenture Application A/c

(Being debenture application money received)

 

Debenture Application A/c                                                                 Dr

Loss on Issue of Debenture A/c (767 x Rs.9)                                       Dr

                 To 9% Debentures A/c

                 To Premium on Redemption of Debenture A/c (767 x Rs.9)

                 To Securities Premium A/c (767 x Rs.4)

(Being debenture issued at premium redeemable at a premium)

 

74399

 

 

 

74399

7670

 

 

 

 

79768

 

 

 

79768

6903

 

 

 

 

 

74399

 

 

 

 

76700

5369

 

 

 

79768

 

 

 

 

76700

6903

3068

 

Concept: Issue of Debentures with Terms of Redemption
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