32 Q32 On 1st April, 2014, a limited company issued 250, 12% debentures of Rs 1,000 each - Accountancy - Issue and Redemption of Debentures

Question

32

Q32 On 1st April, 2014, a limited company issued 250,
12% debentures of Rs 1,000 each at Rs 950 holders of these
debentures have an option to convert their folding into 10%
Preference Shares of Rs 100 each at a premium of Rs 25 per share at
any time within two years
On 31st March ,2015, a year's interest had accrued on
the debentures and remained unpaid A holder of 20 debentures
notified his intention to exercise the above option
Pass necessary journal entries
[Ans, preference Shares issued = 20   debentures  
×   Rs   950 125   =   152 ]

Neha Chopra · Accepted Answer

Dear
Student,

Date

Particulars
LF

Amount (in Rs)

01 Apr
2014
Bank A/c
(250*950)
Dr
2,37,500

Discount on Issue of
debentures A/c (250*50)
Dr
12,500

To 15% Debentures
A/c

2,50,000

(Debentures
issued)

31 Mar
2015
Debenture Interest A/c
(2,50,000*12%)
Dr
30,000

Debenture holders
A/c

30,000

(Debenture interest due
)

15% Debentures A/c
(20*950)
Dr
19,000

To 10% Preference Share
Capital A/c (152*100)

15,200

To Securities Premium A/c
(152*25)

3,800

(20 debentures converted into 152 preference shares of Rs 100 each
issued at Rs 25 per share premium)

No of Preference shares =
19,000100+25= 152
Keep posting!!

â€‹Regards,

Date	Particulars	LF	Amount (in Rs)	Amount (in Rs)
01 Apr 2014	Bank A/c (250*950)	Dr	2,37,500
	Discount on Issue of debentures A/c (250*50)	Dr	12,500
	To 15% Debentures A/c			2,50,000
	(Debentures issued)

31 Mar 2015	Debenture Interest A/c (2,50,000*12%)	Dr	30,000
	Debenture holders A/c			30,000
	(Debenture interest due )

	15% Debentures A/c (20*950)	Dr	19,000
	To 10% Preference Share Capital A/c (152*100)			15,200
	To Securities Premium A/c (152*25)			3,800
	(20 debentures converted into 152 preference shares of Rs 100 each issued at Rs 25 per share premium)