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Vkr Ltd. Issued 975; 9% Debentures of Rs 500 Each on 4-3-2016. Pass Necessary Journal Entries for the Issue of Debentures Under the Following Situations - Accountancy

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VKR Ltd. issued 975; 9% Debentures of Rs 500 each on 4-3-2016. Pass necessary journal entries for the issue of debentures under the following situations :

(a) When debentures were issued at a premium of 10% redeemable at a premium of 6%.

(b) When debentures were issued at a par redeemable at 9% premium.

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Solution

                                                                                   Journal

Date Particulars L.F.

Dr.

Rs

Cr.

Rs

(a)

 

 

 

 

 

 

 

 

 

 

(b)

 

 

 

 

 

 

 

Bank A/c (975 x Rs 550)                                        Dr

                   To Debenture Application A/c

(Being debenture application money received)

Debenture Application A/c                                     Dr

Loss on Issue of Debentures A/c (975 x Rs 30)    Dr

                  To 9% Debentures A/c

                  To Premium on Redemption of Debentures A/c                         (975 x Rs30)

                  To Securities Premium A/c (975 x 50)

(Being debentures issued at premium redeemable at premium)

 

Bank A/c (975 x Rs 500)                                          Dr

                To Debenture Application A/c

(Being debenture application money received)

Debenture Application A/c                                       Dr

Loss on Issue of Debenture A/c (975 x Rs 45)        Dr

                To 9% Debentures A/c

                To Premium on Redemption of Debenture A/c (975                  x Rs45)

(Being debenture issued at par. redeemable at a premium)

 

5,36,250

 

 

5,36,250

29,250

 

 

 

 

 

 

4,87,500

 

 

4,87,500

43,875

 

 

 

 

5,36,250

 

 

 

4,87,500

29,750

48,750

 

 

 

 

4,87,500

 

 

 

4,87,500

43,875

 

 

Concept: Issue of Debentures with Terms of Redemption
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