Question

A Ltd issued 90,00,000, 9% Debentures 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.

Answer 1

$\text{Journal Entries}$
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{LF}& \text{Amt.(Dr)}& \text{Amt.(Cr)}\\ \left(i\right)& \text{Bank A/c}Dr& & 41,40,00,000& \\ & \text{To 9\% Debenture Application A/c}& & & 41,40,00,000\\ & \text{(Debenture application money received}& & & \\ & \text{at Rs. 46 each on 90,00,000 9\% debentures)}& & & \\ & \underset{–}{}& & & \\ \left(ii\right)& \text{9 \% Debenture Application A/c}Dr& & 41,40,00,000& \\ & \text{Discount on Issue of Debenture A/c}Dr& & 3,60,00,000& \\ & \text{To 9 \% Debenture A/c}& & & 45,00,00,000\\ & \text{(9\% debentures application money}& & & \\ & \text{transferred to 9 \% debentures account)}& & & \end{array}$

Note : A single compound entry can also be passed with bank and discount on issue of debentures debit and 9% debentures account credit.