Question

Fena Ltd. issued 7,000, 12$\%$ debentures of Rs 100 each at a premium of 5$\%$ redeemable at a premium of 20$\%$. Pass necessary Journal entries at the time of issue of debentures.

Answer 1

JOURNAL OF FENA LTD.

$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \left(\text{Rs}\right)& \left(\text{Rs}\right)\\ & \text{Bank A/c}\text{Dr.}& & 7,35,000& \\ & \text{To Debentures Application and Allotment A/c}& & & 7,35,000\\ & \left(\text{Being the application money received}\right)& & & \\ & \text{Debentures Application and Allotment A/c}\text{Dr.}& & 7,35,000& \\ & \text{Loss on Issue of Debentures A/c}\text{Dr.}& & 1,40,000& \\ & \text{To 12}\%\text{Debentures A/c}& & & 7,00,000\\ & \text{To Securities Premium Reserve A/c}& & & 35,000\\ & \text{To Premium on Redemption of Debentures A/c}& & & 1,40,000\\ & (\text{Being the issue of 7,000, 12\% debentures of Rs 100 each at}& & & \\ & \text{a premium of Rs 5 and redeemable at a premium of Rs 20})& & & \end{array}$