Question

what will be the journal entry for following:

Expenses on issue of debentures amounted to rs 5000 were to be written off.Pass journal entry.

Answer 1

Dear Student, the solution of your query is as follows.

	Journal Entry
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
		Debenture Issue Expenses A/c	Dr.		5,000
		To Bank A/c				5,000
		(Debenture Issue expenses paid)
		Profit and Loss A/c	Dr.		5,000
		To Debenture Issue Expenses A/c				5,000
		(Amount of Debenture Issue Expenses transferred to Profit and Loss account)

However, sometimes it is given in the question that Debenture Issue Expenses are be written in 3 or 5 years equally. In that case, amount which is to be written in particular year transferred to Profit and Loss A/c.