AshimaLtdissued 2,500, 9% debentures of Rs 100 each on1stApril 2015, redeemable at a premium of 8% after three years - Accountancy - Issue and Redemption of Debentures

Question

AshimaLtdissued 2,500, 9% debentures of Rs 100 each
on1stApril 2015, redeemable at a premium of 8% after
three years According to the issue of prospectus Rs 40 is payable
on application and the balance on allotment of debentures, record
the necessary entries regarding the issue of debentures

Neha Chopra · Accepted Answer

Dear Student,

Journal entries in the books of Ashima Ltd :

Date
Particulars
LF
Amount (in
Rs)
Amount (in
Rs)

01 Apr
2015
Bank A/c
(2,500*40)
Dr
100,000

To 9% Debenture
Application A/c

100,000

(Debenture application
money received on 2,500 debentures @ Rs 40)

9% Debenture Application
A/c
Dr
100,000

Loss on issue of
Debentures A/c (2,500*100*8%)
Dr
20,000

To 9% Debenture
A/c

100,000

To Premium on redemption
of debentures A/c

20,000

(Application money
transferred to Debenture account along with recording of loss due
to premium payable on redemption)

9% Debenture Allotment
A/c (2,500*60)
Dr
150,000

To 9% Debenture
A/c

150,000

(Allotment money @ Rs 60
per debenture due on 2,500 debentures)

Bank
A/c
Dr
150,000

To 9% Debentures
Allotment A/c

150,000

(Allotment money
received)

Regards,

Date	Particulars	LF	Amount (in Rs)	Amount (in Rs)
01 Apr 2015	Bank A/c (2,500*40)	Dr	100,000
	To 9% Debenture Application A/c			100,000
	(Debenture application money received on 2,500 debentures @ Rs 40)

	9% Debenture Application A/c	Dr	100,000
	Loss on issue of Debentures A/c (2,5001008%)	Dr	20,000
	To 9% Debenture A/c			100,000
	To Premium on redemption of debentures A/c			20,000
	(Application money transferred to Debenture account along with recording of loss due to premium payable on redemption)

	9% Debenture Allotment A/c (2,500*60)	Dr	150,000
	To 9% Debenture A/c			150,000
	(Allotment money @ Rs 60 per debenture due on 2,500 debentures)

	Bank A/c	Dr	150,000
	To 9% Debentures Allotment A/c			150,000
	(Allotment money received)

AshimaLtdissued 2,500, 9% debentures of Rs.100 each on1stApril 2015, redeemable at a premium of 8% after three years. According to the issue of prospectus Rs.40 is payable on application and the balance on allotment of debentures, record the necessary entries regarding the issue of debentures.

AshimaLtdissued 2,500, 9% debentures of Rs.100 each on1^stApril 2015, redeemable at a premium of 8% after three years. According to the issue of prospectus Rs.40 is payable on application and the balance on allotment of debentures, record the necessary entries regarding the issue of debentures.