Q no 27 Luxury Cosmetics Ltd issued 30,00,000, 9 % debentures of Rs 500 each at - Accountancy - Issue and Redemption of Debentures

Question

Q no 27 Luxury Cosmetics Ltd issued 30,00,000, 9 % debentures of Rs
500 each at a discount of 4 %, redeemable at a premium of 5 % after
4 years payable as : Rs 200 on application and balance on allotment
Record necessary entries for issue of debentures

Neha Chopra · Accepted Answer

Dear
Student

Journal in the books
of Luxury cosmetics ltd

Date
Particulars

Debit
Credit

Bank A/c (6,000 x
200)
Dr
1,200,000

To Debenture
Application A/c

1,200,000

(Being amount received
on debenture application)

Debenture Application
A/c
Dr
1,200,000

To 9% Debenture
A/c

1,200,000

(Being Debenture A/c
credited)

Debenture Allotment
A/c (6,000 x 280)
Dr
1,680,000

Discount on issue of
Debenture A/c (6,000 x (500 x 4%))
Dr
120,000

To 9% Debeture
A/c

1,800,000

(Being debenture
allotment money due and discount on issue of debenture
booked)

Bank
A/c
Dr
1,680,000

To Debenture Allotment
A/c

1,680,000

(Being Debenture
allotment money received)

Loss on Issue A/c
(30,00,000 x 5%)
Dr
150,000

To Premium on
Redemption of Debenture A/c

150,000

(Being Premium on
redemption booked now only)

Regards

Journal in the books of Luxury cosmetics ltd.
Date	Particulars		Debit	Credit
	Bank A/c (6,000 x 200)	Dr.	1,200,000
	To Debenture Application A/c			1,200,000
	(Being amount received on debenture application)

	Debenture Application A/c	Dr.	1,200,000
	To 9% Debenture A/c			1,200,000
	(Being Debenture A/c credited)

	Debenture Allotment A/c (6,000 x 280)	Dr.	1,680,000
	Discount on issue of Debenture A/c (6,000 x (500 x 4%))	Dr.	120,000
	To 9% Debeture A/c			1,800,000
	(Being debenture allotment money due and discount on issue of debenture booked)

	Bank A/c	Dr.	1,680,000
	To Debenture Allotment A/c			1,680,000
	(Being Debenture allotment money received)

	Loss on Issue A/c (30,00,000 x 5%)	Dr.	150,000
	To Premium on Redemption of Debenture A/c			150,000
	(Being Premium on redemption booked now only)

Q no. 27. Luxury Cosmetics Ltd. issued 30,00,000, 9 % debentures of Rs. 500 each at a discount of 4 %, redeemable at a premium of 5 % after 4 years payable as : Rs. 200 on application and balance on allotment. Record necessary entries for issue of debentures.