Question

On 1st January, 2017, Raha Ltd. issued 6,000, 8% Debentures of nominal (face) value of ₹ 100 each redeemable at 5% premium in equal proportions at the end of 5, 10 and 15 years. It has a balance of ₹ 10,000 in Securities Premium Reserve.
Pass Journal entries. Also give Journal entries for writing off Loss on Issue of Debentures.

Answer 1

In the books of Raha Ltd. Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2017
January 01	Bank A/c (6,000 × 100)	Dr.		6,00,000
	To Debentures Application & Allotment A/c (6,000 × 100)				6,00,000
	(Being application money received on 8% Debentures issued)
January 01	Debentures Application & Allotment A/c	Dr.		6,00,000
	Loss on Issue of Debentures A/c	Dr.		30,000
	To 8% Debentures A/c				6,00,000
	To Premium on Redemption of Debentures A/c				30,000
	(Being application & allotment money adjusted along with 5%
	premium payable on redemption)
2017
December 31	Securities Premium Reserve A/c	Dr.		10,000
	Statement of Profit & Loss A/c	Dr.		20,000
	To Loss on Issue of Debentures A/c				30,000
	(Being loss on issue of debentures written off)