A. Ltd. issued 90,00,000, 9% Debenture of Rs 50 each at a discount of 8%, redeemable at par any time after 9 years. Record necessary entries in the books of A. Ltd.

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Solution

Books of A. Ltd.

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Bank A/c

Dr.

41,40,00,000

Discount on Issue of Debenture A/c

Dr.

3,60,00,000

To 9% Debenture A/c

45,00,00,000

(Money received for 90,00,000 9% Debentures

@ Rs 50 each at discount of 8%)

Alternative Method:

Bank A/c

Dr.

41,40,00,000

To 9% Debentures Application A/c

41,40,00,000

(Debenture Application money received @ Rs 46 each

on 90,00,000 9% Debentures)

9% Debentures Application A/c

Dr.

41,40,00,000

Discount on issue of Debentures A/c

Dr.

3,60,00,000

To 9% Debenture A/c

4,50,00,000

(9% Debentures application money transferred to

9% Debenture Account)

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Books of A. Ltd. Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		41,40,00,000
	Discount on Issue of Debenture A/c	Dr.		3,60,00,000
	To 9% Debenture A/c				45,00,00,000
	(Money received for 90,00,000 9% Debentures @ Rs 50 each at discount of 8%)

Alternative Method:

	Bank A/c	Dr.	41,40,00,000
	To 9% Debentures Application A/c			41,40,00,000
	(Debenture Application money received @ Rs 46 each on 90,00,000 9% Debentures)

	9% Debentures Application A/c	Dr.	41,40,00,000
	Discount on issue of Debentures A/c	Dr.	3,60,00,000
	To 9% Debenture A/c			4,50,00,000
	(9% Debentures application money transferred to 9% Debenture Account)