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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.

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Solution

JOURNAL
Date ParticularsL.F.DebitCredit(Rs) (Rs) Bank A/cDr.3,60,000 To Equity Share Application A/c3,60,000(Being application money received on 12,000 shares)–––––––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Application A/cDr.3,60,000 To Equity Share Capital A/c1,50,000 To Bank A/c60,000 To Equity Share Allotment A/c1,50,000(Being application money adjusted) –––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Allotment A/cDr.2,25,000 To Equity Share Capital A/c1,00,000 To Securities Premium Reserve A/c1,25,000(Being allotment money due) ––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/cDr.75,000 To Equity Share allotment A/c75,000(Being balance of allotment money received) ––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share First Call A/cDr.1,25,000 To Equity Share Capital A/c1,25,000(Being first call money due) ––––––––––––––––––––––––––––––––––––––––––––––––Bank A/cDr.1,18,750Calls in Arrears A/cDr.6,250 To Equity Share Capital Call A/c1,25,000(Being call money received except on 250 shares)–––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Capital A/cDr.18,750 To Calls in Arrears A/c6,250 To Share Forefeiture A/c12,500(Being 250 shares were forfeited) ––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/cDr.27,500 To Equity Share Capital A/c18,750 To Securities Premium Reserve A/c8,750(Being forfeited share re-issued at Rs 110) –––––––––––––––––––––––––––––––––––––––––––––––––––––Share Forfeited A/cDr.12,500 To Capital Reserve A/c12,500(Being profit on re-issue of forfeiture transferred tocapital reserve) –––––––––––––––––––––––––––––––––––––––––––––––––––––––Equity Share Second Call A/cDr.1,18,750 To Equity Share Capital A/c1,18,750(Being second call money due on 4,750 shares) ––––––––––––––––––––––––––––––––––––––––––––––––––––Bank A/cDr.1,16,250Calls in Arrears A/cDr.2,500 To Equity Share Second Call A/c1,18,750(Being second call money received on 4,650 shares)

OR
JOURNAL
Date ParticularsL.F.DebitCredit(Rs) (Rs) I.Bank A/cDr.16,50,000 To Debenture Application and Allotment A/c16,50,000(Being application money received on debenture) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––Debenture Application and Allotment A/cDr.16,50,000 To 10% Debentures A/c15,00,000 To Securities Premium Reserve A/c1,50,000(Being application money transferred to Debenture A/c)–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––II.Bank A/cDr.14,25,000 To Debenture Application and Allotment A/c14,25,000(Being application money received on debenture) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––Debenture Application and Allotment A/cDr.14,25,000Discount on Issue of Debentures A/cDr.75,000 To 10% Debentures A/c15,00,000(Being application money transfer to Debenture A/c) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––––III.Bank A/cDr.12,00,000 To Bank Loan A/c12,00,000(Being loan taken from bank) –––––––––––––––––––––––––––––––––––––––––––––––––––––––Debenture Suspense A/cDr.15,00,000 To 10% Debenture A/c15,00,000(Being debenture issued as collateral security) –––––––––––––––––––––––––––––––––––––––––––––––––––––––––IV.Machinery A/cDr.13,50,000 To Vendor A/c13,50,000(Being machinery purchased) ––––––––––––––––––––––––––––––––––––––––––––––––––––––––Vendor A/cDr.13,50,000Discount on Issue of Debenture A/cDr.1,50,000 To 10% Debenture A/c15,00,000(Being debentures issued to vendor at a discount)


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