Question

Alka Ltd . issued 5,000, 10% Debentures of ​₹ 1,000 each at a discount of 10% redeemable at a premium of 5% after 5 years . According to the terms of issue ​₹ 500 was payable on application and the balance amount on allotment of debentures. Record necessary entries regarding issue of 10% Debentures.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (5,000$\times$500)	Dr.		25,00,000
	To Debenture Application A/c				25,00,000
	(Received application money on 5,000 debentures)
	Debenture Application A/c	Dr.		25,00,000
	To 10% Debentures A/c				25,00,000
	(Transfer of application money to Debentures A/c)
	Debenture Allotment A/c (5,000$\times$400)	Dr.		20,00,000
	Discount on issue of Debentures A/c (5,000$\times$100)			5,00,000
	Loss on issue of Debentures A/c (5,000$\times$50)	Dr.		2,50,000
	To 10% Debentures A/c (5,000$\times$500)				25,00,000
	To Premium on Redemption of Debentures A/c (5,000$\times$50)				2,50,000
	(Allotment due on 5,000 Debentures at a discount of Rs 100 per debentures and redeemable at premium of 5%)
	Bank A/c	Dr.		20,00,000
	To Debenture Allotment A/c				20,00,000
	(Allotment money received)