Please give the accounting treatment 1 When debentures are purchased at a price below nominal value of debentures 2 - Accountancy - Issue and Redemption of Debentures

Question

Please give the accounting treatment
1 When debentures are purchased at a price below nominal value
of debentures
2 When debentures are purchased for immediate cancellation

Saurabh Mehta · Accepted Answer

Purchase of debenture below nominal value is simply issue of
debenture at a discount Following is the Accounting Treatment for
the issue of debenture at discount

Date

Particulars

L F

Debit

Amount

(Rs)

Credit

Amount

(Rs)

Bank A/c

Dr

Purchase Price

To Debenture Application A/c

Purchase Price

(Debentures issued at discount)

Debenture Application A/c

Dr

Purchase Price

Discount on Issue of Debenture A/c

Dr

Discount Price

To Debenture A/c

Face Value

(Amount adjusted on allotment)

Topic â€œPurchase of Debenture for immediate
cancellationâ€ have been deleted from CBSE Class XII
syllabus from Academic Year 2012-13 onwards

Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c	Dr.		Purchase Price
	To Debenture Application A/c				Purchase Price
	(Debentures issued at discount)

	Debenture Application A/c	Dr.		Purchase Price
	Discount on Issue of Debenture A/c	Dr.		Discount Price
	To Debenture A/c				Face Value
	(Amount adjusted on allotment)

Please give the accounting treatment 1. When debentures are purchased at a price below nominal value of debentures 2. When debentures are purchased for immediate cancellation

Please give the accounting treatment

1. When debentures are purchased at a price below nominal value of debentures

2. When debentures are purchased for immediate cancellation