bright Limited issued 5000 10% debenture of hundred each on 1st April 2020 the issue was fully subscribed as per - Accountancy - Issue of Debentures

Question

bright Limited issued 5000 10% debenture of hundred each on 1st
April 2020 the issue was fully subscribed as per the terms of issue
interest on the debentures is payable half-yearly on 30 September
and 31st March pass necessary journal entries related to the
debenture interest for the year ending 31st March 2021 and transfer
of interest on debentures of the Year to the statement of profit
and loss

Rachna Puneet Mehta · Accepted Answer

Solution

Date
particular
l f
â€‹â€‹â€‹â€‹
Dr
Cr

30th sep 2020
Debentures interest A/c Dr

25,000

To Debenturesholders A/c

25,000

(Being interest due)

Debenturesholders A/c Dr

25,000

To bank A/c

25,000

(Being interest paid)

31st March 2021
Debentures interest A/c Dr

25,000

To Debenturesholders A/c

25,000

(Being interest due)

Debenturesholders A/c Dr

25,000

To bank A/c

25,000

(Being interest paid)

Statement of profit and loss A/c Dr

50,000

To debenture interest A/c

50,000

Working note
1) half year interest = 5000 × 100 × 10% ×
6/12
25000

Date	particular	l.f	Dr	Cr
30th sep 2020	Debentures interest A/c. Dr.		25,000
	To Debenturesholders A/c			25,000
	(Being interest due)
	Debenturesholders A/c. Dr.		25,000
	To bank A/c			25,000
	(Being interest paid)
31st March 2021	Debentures interest A/c. Dr		25,000
	To Debenturesholders A/c			25,000
	(Being interest due)
	Debenturesholders A/c. Dr.		25,000
	To bank A/c			25,000
	(Being interest paid)
	Statement of profit and loss A/c. Dr.		50,000
	To debenture interest A/c			50,000