Question

pass necessary journal entiresfor issue of debenturesin the following cases:
1 when company issues 10009% debentures of rs100each at par and redeemable at par
2 when company issues 10009% debentures at par and redemableat a premium of 10%

Answer 1

Dear Student,

The solution to your query is provided below:

	Journal Entry
Date		Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
		Date of Issue
(1)		Bank A/c	Dr.		1,00,000
		To Debenture Application A/c				1,00,000
		(Applications for 1,000 debentures were received)
		Debenture Application A/c	Dr.		1,00,000
		To 9% Debentures A/c				1,00,000
		(1,000 Debentures issued at Rs 100 each)
		Date of Issue
(2)		Bank A/c	Dr.		1,00,000
		To Debenture Application A/c				1,00,000
		(Applications for 1,000 debentures were received)
		Debenture Application A/c	Dr.		1,00,000
		Loss on issue of debentures A/c	Dr.		10,000
		To 9% Debentures A/c				1,00,000
		To Premium on redemption of Debentures A/c				10,000
		(1,000 Debentures issued at Rs 100 each redeemable at 10% Premium)