Alok Ltd. issued 7,000, 10% Debentures of ₹ 500 each at a premium of ₹ 50 per debenture redeemable at a premium of 10% after 5 years. According to the terms of issue, ₹ 200 was payable on application and balance on allotment.
Record necessary Journal entries at the time of issue of 10% Debentures.

Open in App

Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

Bank A/c (7,000 $\times$ 200)

Dr.

14,00,000

To Debenture Application A/c

14,00,000

(Received application money on 7,000 debentures)

Debenture Application A/c

Dr.

14,00,000

To 10% Debentures A/c

14,00,000

(Transfer of application money to Debentures A/c)

Debenture Allotment A/c (7,000 $\times$ 350)

Dr.

24,50,000

Loss on issue of Debentures A/c (7,000 $\times$ 50)

Dr.

3,50,000

To 10% Debentures A/c (7,000 $\times$ 300)

21,00,000

To Securities Premium Reserve A/c (7,000 $\times$ 50)

3,50,000

To Premium on Redemption of Debentures A/c(7,000 $\times$ 50)

3,50,000

(Allotment due on 7,000 Debentures at a premium of Rs 50 per debentures and redeemable at premium of 10%)

Bank A/c

Dr.

24,50,000

To Debenture Allotment A/c

24,50,000

(Allotment money received)

Suggest Corrections

Similar questions

Q. 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.

Q. Office Products Ltd, issued on 1st April, 2018, 20,000, 9% Debentures of ₹ 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Pass the necessary Journal entries.

Q. Raj Ltd . issued 5,000; 8% Debentures of ₹ 100 each at a premium of 5% payable as follows:
₹ 10 on application ; ₹ 20 along with premium on allotment and balance on first and final call.
Pass necessary Journal entries.

Traditional products Ltd. offered 2,00,000, $8 %$ Debentures of Rs 500 each at a premium of $10 %$ payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But applications are received for 3,00,000 debentures and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debentures.

Q. Pass necessary Journal entries for the issue of Debentures in the following cases:
(a) ₹ 40,000; 15% Debentures of ₹ 100 each issued at a discount of 10% redeemable at par.
(b) ₹ 80,000; 15% Debentures of ₹ 100 each issued at a premium of 10% redeemable at a premium of 10%.

Join BYJU'S Learning Program

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (7,000 $\times$ 200)	Dr.		14,00,000
	To Debenture Application A/c				14,00,000
	(Received application money on 7,000 debentures)

	Debenture Application A/c	Dr.		14,00,000
	To 10% Debentures A/c				14,00,000
	(Transfer of application money to Debentures A/c)

	Debenture Allotment A/c (7,000 $\times$ 350)	Dr.		24,50,000
	Loss on issue of Debentures A/c (7,000 $\times$ 50)	Dr.		3,50,000
	To 10% Debentures A/c (7,000 $\times$ 300)				21,00,000
	To Securities Premium Reserve A/c (7,000 $\times$ 50)				3,50,000
	To Premium on Redemption of Debentures A/c(7,000 $\times$ 50)				3,50,000
	(Allotment due on 7,000 Debentures at a premium of Rs 50 per debentures and redeemable at premium of 10%)

	Bank A/c	Dr.		24,50,000
	To Debenture Allotment A/c				24,50,000
	(Allotment money received)