Pass the necessary journal entries for the issue of debentures for the following transactions: (i) Anand Ltd issued 800, 9% - Accountancy - Issue and Redemption of Debentures

Question

Pass the necessary journal entries for the issue of debentures for
the
following transactions:
(i) Anand Ltd issued 800, 9% Debentures of Rs 500 each at a premium
of 20%
to the vendors, for Machinery purchased from them costing Rs
4,80,000
(ii) Dawar Ltd issued 5,000, 7% Debentures of Rs 200 each at a
premium of
5% redeemable at a premium of 10%
(iii) Novelty Ltd issued 1,000, 8% Debentures of Rs 100 each at a
discount of
5% redeemable at a premium of 10%

Komal Rani · Accepted Answer

Dear Student

JOURNAL

Date

Particulars

L
F

Debit

Credit

i)

Machinery
A/c

Dr

480000

To Vendor
A/c

480000

(Being Machinery
Purchased)

vendor Co
A/c

Dr

480000

To 9% debentures
A/c

400000

To Securities premium
a/c

80000

(Being debentures issued to the
vendor at 20 %
premium)

ii)

Bank
A/c

Dr

1050000

To 7% Debenture application and
allotment A/c

1050000

(Being debentures
issued)

7% Debenture application and
allotment A/c

Dr

1050000

Loss on issue of debenture
A/c

Dr

100000

To 7% Debentures
A/c

1000000

To Premium on issued of Deb
A/c

50000

To Premium on redemption of
debentures A/c

100000

(Being debentures issued at a
premium and redeemable at 10%
premium)

iii)

Bank
A/c

Dr

95000

To 8% Debenture application and
allotment A/c

95000

(Being debentures
issued)

8% Debenture application and
allotment A/c

Dr

95000

Loss on issue of debenture
A/c

Dr

15000

To 8% Debentures
A/c

100000

To Premium on redemption of
debentures A/c

10000

(Being debentures issued at
discount and redeemable at
Premium)

Regards

	JOURNAL
Date	Particulars		L.F.	Debit	Credit
i)	Machinery A/c	Dr.		480000
	To Vendor A/c				480000
	(Being Machinery Purchased)

	vendor Co. A/c	Dr.		480000
	To 9% debentures A/c				400000
	To Securities premium a/c				80000
	(Being debentures issued to the vendor at 20 % premium)
ii)	Bank A/c	Dr.		1050000
	To 7% Debenture application and allotment A/c				1050000
	(Being debentures issued)

	7% Debenture application and allotment A/c	Dr.		1050000
	Loss on issue of debenture A/c	Dr.		100000
	To 7% Debentures A/c				1000000
	To Premium on issued of Deb. A/c				50000
	To Premium on redemption of debentures A/c				100000
	(Being debentures issued at a premium and redeemable at 10% premium)
iii)	Bank A/c	Dr.		95000
	To 8% Debenture application and allotment A/c				95000
	(Being debentures issued)

	8% Debenture application and allotment A/c	Dr.		95000
	Loss on issue of debenture A/c	Dr.		15000
	To 8% Debentures A/c				100000
	To Premium on redemption of debentures A/c				10000
	(Being debentures issued at discount and redeemable at Premium)