Question

M / s. Uncle Chips Ltd. issued 5,000 equity shares of Rs 100 each at a peremium of Rs 25 per share. The company received 12,000 applications on which 2,000 applications were totally rejected and their amount was refunded, while the remaining applicants were allotted shares on pro-rata basis. The amount of shares received is as under :
On application Rs 30, on allotment Rs 45 (including premium), on first call Rs 25 and on second call Rs 25. Allotment money was received in full. First call was made and received except on 250 shares held by Mr. Govind. His shares were forfeited and re-issued at Rs 75 paid for Rs 110 per share to Mr. Anand. Final call was made and received except on 100 shares held by Mr. Binu. Pass Journal entries.

OR

XYZ, Ltd. issued 15,000, 10% debentures of Rs 100 each. Give Journal entries and the Balance Sheet in each of the following cases :

(i) The debentures are issued at a premium of 10%.

(ii) The debentures are issued at a discount of 5%.

(iii) The debentures are issued as a collateral security to bank against a loan of Rs 12,00,000; and

(iv) The debentures are issued to a supplier of machinery costing Rs 13,50,000.

Answer 1

JOURNAL
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & & \text{(Rs)}& \text{(Rs)}\\ & \text{Bank A/c}& \text{Dr.}& & 3,60,000& \\ & \text{To Equity Share Application A/c}& & & & 3,60,000\\ & \underset{–}{\text{(Being application money received on 12,000 shares)}}& & & & \\ & \text{Equity Share Application A/c}& \text{Dr.}& & 3,60,000& \\ & \text{To Equity Share Capital A/c}& & & & 1,50,000\\ & \text{To Bank A/c}& & & & 60,000\\ & \text{To Equity Share Allotment A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being application money adjusted)}}& & & & \\ & \text{Equity Share Allotment A/c}& \text{Dr.}& & 2,25,000& \\ & \text{To Equity Share Capital A/c}& & & & 1,00,000\\ & \text{To Securities Premium Reserve A/c}& & & & 1,25,000\\ & \underset{–}{\text{(Being allotment money due)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 75,000& \\ & \text{To Equity Share allotment A/c}& & & & 75,000\\ & \underset{–}{\text{(Being balance of allotment money received)}}& & & & \\ & \text{Equity Share First Call A/c}& \text{Dr.}& & 1,25,000& \\ & \text{To Equity Share Capital A/c}& & & & 1,25,000\\ & \underset{–}{\text{(Being first call money due)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 1,18,750& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 6,250& \\ & \text{To Equity Share Capital Call A/c}& & & & 1,25,000\\ & \underset{–}{\text{(Being call money received except on 250 shares)}}& & & & \\ & \text{Equity Share Capital A/c}& \text{Dr.}& & 18,750& \\ & \text{To Calls in Arrears A/c}& & & & 6,250\\ & \text{To Share Forefeiture A/c}& & & & 12,500\\ & \underset{–}{\text{(Being 250 shares were forfeited)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 27,500& \\ & \text{To Equity Share Capital A/c}& & & & 18,750\\ & \text{To Securities Premium Reserve A/c}& & & & 8,750\\ & \underset{–}{\text{(Being forfeited share re-issued at Rs 110)}}& & & & \\ & \text{Share Forfeited A/c}& \text{Dr.}& & 12,500& \\ & \text{To Capital Reserve A/c}& & & & 12,500\\ & \text{(Being profit on re-issue of forfeiture transferred to}& & & & \\ & \underset{–}{\text{capital reserve)}}& & & & \\ & \text{Equity Share Second Call A/c}& \text{Dr.}& & 1,18,750& \\ & \text{To Equity Share Capital A/c}& & & & 1,18,750\\ & \underset{–}{\text{(Being second call money due on 4,750 shares)}}& & & & \\ & \text{Bank A/c}& \text{Dr.}& & 1,16,250& \\ & \text{Calls in Arrears A/c}& \text{Dr.}& & 2,500& \\ & \text{To Equity Share Second Call A/c}& & & & 1,18,750\\ & \text{(Being second call money received on 4,650 shares)}& & & & \end{array}$

OR
JOURNAL
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & & \text{(Rs)}& \text{(Rs)}\\ \text{I.}& \text{Bank A/c}& \text{Dr.}& & 16,50,000& \\ & \text{To Debenture Application and Allotment A/c}& & & & 16,50,000\\ & \underset{–}{\text{(Being application money received on debenture)}}& & & & \\ & \text{Debenture Application and Allotment A/c}& \text{Dr.}& & 16,50,000& \\ & \text{To}10\%\text{Debentures A/c}& & & & 15,00,000\\ & \text{To Securities Premium Reserve A/c}& & & & 1,50,000\\ & \underset{–}{\text{(Being application money transferred to Debenture A/c)}}& & & & \\ \text{II.}& \text{Bank A/c}& \text{Dr.}& & 14,25,000& \\ & \text{To Debenture Application and Allotment A/c}& & & & 14,25,000\\ & \underset{–}{\text{(Being application money received on debenture)}}& & & & \\ & \text{Debenture Application and Allotment A/c}& \text{Dr.}& & 14,25,000& \\ & \text{Discount on Issue of Debentures A/c}& \text{Dr.}& & 75,000& \\ & \text{To}10\%\text{Debentures A/c}& & & & 15,00,000\\ & \underset{–}{\text{(Being application money transfer to Debenture A/c)}}& & & & \\ \text{III.}& \text{Bank A/c}& \text{Dr.}& & 12,00,000& \\ & \text{To Bank Loan A/c}& & & & 12,00,000\\ & \underset{–}{\text{(Being loan taken from bank)}}& & & & \\ & \text{Debenture Suspense A/c}& \text{Dr.}& & 15,00,000& \\ & \text{To}10\%\text{Debenture A/c}& & & & 15,00,000\\ & \underset{–}{\text{(Being debenture issued as collateral security)}}& & & & \\ \text{IV.}& \text{Machinery A/c}& \text{Dr.}& & 13,50,000& \\ & \text{To Vendor A/c}& & & & 13,50,000\\ & \underset{–}{\text{(Being machinery purchased)}}& & & & \\ & \text{Vendor A/c}& \text{Dr.}& & 13,50,000& \\ & \text{Discount on Issue of Debenture A/c}& \text{Dr.}& & 1,50,000& \\ & \text{To}10\%\text{Debenture A/c}& & & & 15,00,000\\ & \text{(Being debentures issued to vendor at a discount)}& & & & \end{array}$