Question

Zoltas Ltd. issued 40,000; 9% Debentures of ₹ 100 each at par for cash payable along with the application. Applications were received for 60,000 debentures. Debentures were allotted and excess application money was refunded. Pass Journal entries in the books of the company.

Answer 1

Journal Entries In the Books of Zoltas Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Bank A/c   ...Dr.		60,00,000
	To Debentures Application A/c			60,00,000
	(Application money received on 60,000 debentures)
2.	Debentures Application A/c   ...Dr.		60,00,000
	To 9% Debentures A/c			40,00,000
	To Bank A/c			20,00,000
	(40,000 debentures allotted and excess application money refunded)

Working Note:

Application money received:

60,000 × ₹ 100 = ₹ 60,00,000

Amount required for 40,000 debentures:

40,000 × ₹ 100 = ₹ 40,00,000

Excess application money refunded:

₹ 60,00,000 − ₹ 40,00,000 = ₹ 20,00,000