Question

Footfall Ltd. issues 10,000 Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 5% after the expiry of three years.
Pass Journal entries for the issue of these debentures.

Answer 1

Books of Footfall Ltd.
Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		9,00,000
	To Debenture Application A/c				9,00,000
	(Debenture application money received for 10,000 debentures at Rs 90 each)
	Debenture Application A/c	Dr.		9,00,000
	Discount on Issue of Debenture A/c	Dr.		1,00,000
	Loss on issue of Debentures A/c	Dr.		50,000
	To Debentures A/c				10,00,000
	To Premium on Redemption A/c				50,000
	(10,000 Debentures of Rs 100 each issued at 10% discount with the term repayable at 5% redemption)
	Debentures A/c	Dr.		10,00,000
	Premium on Redemption A/c	Dr.		50,000
	To Debentureholders’ A/c				10,50,000
	(Debentures due for redemption along with premium on redemption)
	Debentureholders’ A/c	Dr.		10,50,000
	To Bank A/c				10,50,000
	(Amount due for redemption paid to debenture holders)