A limited company issued ₹ 1,00,000, 9% Debentures at a discount of 6% on 1st April, 2017. These debentures are to be redeemed equally, spread over 5 annual instalments.
Pass the Journal entries for issue of debentures and writing off the discount.

Open in App

Solution

In the books of S. Singh Ltd.

Journal

Date

Particulars

L.F.

Debit Amount (₹)

Credit Amount (₹)

2017

April 01
Bank A/c
Dr.

94,000

To Debentures Application & Allotment A/c

94,000

(Being application money received on 9% Debentures issued at 6% discount)

April 01
Debentures Application & Allotment A/c
Dr.

94,000

Discount on Issue of Debentures A/c
Dr.

6,000

To 9% Debentures A/c

1,00,000

(Being application & allotment money adjusted)

2018

March 31
Statement of Profit & Loss A/c
Dr.

6,000

To Discount on Issue of Debentures A/c

6,000

(Being discount on issue of debentures written off)

Suggest Corrections

Similar questions

Q. On 1st April, 2013, ABC Ltd. issued 10,000 , 10% Debentures of ₹ 100 each at a discount of 4% redeemable after 5 years at a premium of 6% .
Pass the necessary journal entries for issue of debentures and writing off Loss on issue of Debentures. Also prepare Loss on issue of Debentures Account.

J Ltd issued Rs 20,00,000, $15 %$ Debentures at $8 %$ discount. Debentures are to be redeemed in the following manner :

$\begin{matrix} Year-end & Face value of Debentures Rs 2 & 2, 00, 000 3 & 4, 00, 000 4 & 6, 00, 000 5 & 8, 00, 000 \end{matrix}$

Pass journal entry for issue of Debentures and prepare Discount on Issue of Debentures Account for 5 years.

A company issued debentures of the face value of Rs 5,00,000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs,1,00,000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.

Calculate the amount of discount to be written-off each year. Give journal entries also.

On 1st April, 2012, a Limited Company issued $11 %$ Rs 10,00,000 debentures at a discounr of $6 %$ repayable at the end of 5 years at par. Pass journal entries for the issue of debentures and prepare Discount on Issue of debentures Account for five years. Assume that the accounts are closed on 31st March every year.

Q. Tetley Ltd. issued 10,000,9% Debentures of ₹ 100 each at a discount of 5% redeemable at the end of 5 years at a premium of 10%. Tetley Ltd. has a balance of ₹ 50,000 in Securities Premium Reserve . Loss on Issue of debentures is to be written off equally over the life of debentures.
Pass the journal entries for writing off the Loss on Issue of Debentures.

Join BYJU'S Learning Program

In the books of S. Singh Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
April 01	Bank A/c	Dr.		94,000
	To Debentures Application & Allotment A/c				94,000
	(Being application money received on 9% Debentures issued at 6% discount)

April 01	Debentures Application & Allotment A/c	Dr.		94,000
	Discount on Issue of Debentures A/c	Dr.		6,000
	To 9% Debentures A/c				1,00,000
	(Being application & allotment money adjusted)
2018
March 31	Statement of Profit & Loss A/c	Dr.		6,000
	To Discount on Issue of Debentures A/c				6,000
	(Being discount on issue of debentures written off)

A limited company issued ₹ 1,00,000, 9% Debentures at a discount of 6% on 1st April, 2017. These debentures are to be redeemed equally, spread over 5 annual instalments. Pass the Journal entries for issue of debentures and writing off the discount.

A limited company issued ₹ 1,00,000, 9% Debentures at a discount of 6% on 1st April, 2017. These debentures are to be redeemed equally, spread over 5 annual instalments.
Pass the Journal entries for issue of debentures and writing off the discount.