BG ltd. issued 2,000 , 12% debentures of rs100 each on 1st april 2012 the issue was fully suscribed interest on debentures is payable half yearly on 30 sep. nd 31st march nd the tax deducted at source is 10% pass journal entries related to debenture interest and transfer of interst on debentures of the year to statement of PL ..
Dear Student,
The solution to your query is provided below.
The solution to your query is provided below.
Journal | |||||
Date | Particulars | L.F. | Debit Amount (Rs) |
Credit Amount (Rs) |
|
September | Debenture Interest A/c | Dr. | 12,000 | ||
30, 2012 | To Income Tax Payable A/c | 1,200 | |||
To Debentureholders’ A/c | 10,800 | ||||
(Amount of Interest due for 6 months and tax deducted at source) | |||||
September | Debentureholders’ A/c | Dr. | 10,800 | ||
30, 2012 | To Bank A/c | 10,800 | |||
(Interest paid to the debentureholders) | |||||
September | Income Tax Payable A/c | Dr. | 1,200 | ||
30, 2012 | To Bank A/c | 1,200 | |||
(Payment of tax on interest on debentures) | |||||
March | Debenture Interest A/c | Dr. | 12,000 | ||
31, 2013 | To Income Tax Payable A/c | 1,200 | |||
To Debentureholders’ A/c | 10,800 | ||||
(Amount of Interest due for 6 months and tax deducted at source) | |||||
March | Debentureholders’ A/c | Dr. | 10,800 | ||
31, 2013 | To Bank A/c | 10,800 | |||
(Interest paid to the debentureholders) | |||||
March | Income Tax Payable A/c | Dr. | 1,200 | ||
31, 2012 | To Bank A/c | 1,200 | |||
(Payment of tax on interest on debentures) | |||||
March | Statement of Profit and Loss | Dr. | 24,000 | ||
31, 2013 | To Debenture Interest A/c | 24,000 | |||
(Interest or debentures transferred to Profit and Loss Account) | |||||