Question

G Ltd issued 75,00,000, 6% Debentures of Rs.50 each at par payable Rs.15 on application and Rs. 35 on allotment, redeemable at par after 7 years from the date of issue of debentures. Record necessary entries in the books of company.

Answer 1

$\text{Journal Entries}$
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{LF}& \text{Amt.(Dr)}& \text{Amt.(Cr)}\\ \left(i\right)& \text{Bank A/c}Dr& & 11,25,00,000& \\ & \text{To 6\% Debenture Application A/c}& & & 11,25,00,000\\ & \text{(Application money at Rs. 15 each}& & & \\ & \text{received for 75,00,000 debentures)}& & & \\ & \underset{–}{}& & & \\ \left(ii\right)& \text{6 \% Debenture Application A/c}Dr.& & 11,25,00,000& \\ & \text{To 6 \% Debentures A/c}& & & 11,25,00,000\\ & \text{(Application money of 75,00,000}& & & \\ & \text{debentures transferred to 6 \% debentures}& & & \\ & \text{account}& & & \\ & \underset{–}{}& & & \\ \left(iii\right)& \text{Bank A/c}Dr& & 26,25,00,000& \\ & \text{To 6 \% Debenture Allotment A/c}& & & 26,25,00,000\\ & \text{(Allotment money at Rs. 35 each received}& & & \\ & \text{for 75,00,000 debentures)}& & & \\ & \underset{–}{}& & & \\ \left(iv\right)& \text{6 \% Debenture Allotment A/c}Dr& & 26,25,00,000& \\ & \text{To 6 \% Debenture A/c}& & & 26,25,00,000\\ & \text{(Allotment moeny at Rs. 35}& & & \\ & \text{each on 75,00,000 debentures transfer to debenture account)}& & & \end{array}$

Note : The entries for issue of debentures are same as that of shares with only difference that 'capital' word is not used