Question

You are required to pass Journal entries to record the following issue of debentures and to write off capital loss:

Shaktiman Ltd. issues 3,000, 9% Debentures of ₹ 100 each at a discount of 7%, to be redeemed at a premium of 10% after 4 years.

Answer 1

JOURNAL OF ENTRIES SHAKTIMAN LTD.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Bank A/c (3,000 × ₹ 93)   ...Dr.		2,79,000
	To Debentures Application and Allotment A/c			2,79,000
	(Debentures application money received)
2.	Debentures Application and Allotment A/c   ...Dr.		2,79,000
	Loss on Issue of Debentures A/c (₹ 21,000 + ₹ 30,000)   ...Dr.		51,000
	To 9% Debentures A/c			3,00,000
	To Premium on Redemption of Debentures A/c			30,000
	(Issue of 3,000; 9% Debentures of ₹ 100 each at a discount of 7% and repayable at a premium of 10%)
3.	Statement of Profit & Loss (Finance Cost)   ...Dr.		51,000
	To Loss on Issue of Debentures A/c			51,000
	(Loss on issue of Debentures written off)