Question

Y Ltd. invited applications for issuing 2000, 9% debentures of Rs 100 each at a discount of 10%. The whole amount was payable at the time of application. Applications for 2400 debentures were received and pro-rata allotment was made to all the applicants.  
Pass necessary journal entries for the issue of debentures. 

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (2,400 × 90)	Dr.		2,16,000
	To Debenture Application & Allotment A/c				2,16,000
	(Amount received on 2,400 debentures issued at a discount of 10%, face value Rs 100)
	Debenture Application & Allotment A/c	Dr.		2,16,000
	Discount on Issue of Debentures A/c (2,000 × 10)	Dr.		20,000
	To 9% Debentures A/c (2,000 × 100)				2,00,000
	To Bank A/c (400 × 90)				36,000
	(Application and allotment money received transferred to Debentures A/c and balance refunded)