Question

R Ltd offered 20,00,000, 10% Debentures of Rs.200 each at a discount of 7% redeemable at premium of 8% after 9 years. Record necessary entries in the books of R Ltd.

Answer 1

$\text{Journal Entries}$
$\begin{array}{cccccc}\text{Date}& \text{Particulars}& & \text{LF}& \text{Amt. (Dr)}& \text{Amt.(Cr)}\\ \text{(i)}& \text{Bank A/c}& \text{Dr}& & 37,20,00,000& \\ & \text{To 10\% Debenture Application and Allotment A/c}& & & & 37,20,00,000\\ & \text{(Debentures application and allotment}& & & & \\ & \text{money received for 20,00,000, 10\% debentures}& & & & \\ & \text{at Rs.200 each at 7\% discount.)}& & & & \\ & \underset{–}{}& & & & \\ \text{(ii)}& \text{10\% Debentures Applications and Allotment A/c}& \text{Dr}& & 37,20,00,000& \\ & \text{Loss on Issue of Debentures A/c}& \text{Dr}& & 3,20,00,000& \\ & \text{Discount on Issue of Debentures A/c}& \text{Dr}& & 2,80,00,000& \\ & \text{To 10\% Debenture A/c}& & & & 40,00,00,000\\ & \text{To Premium on Redemption of Debentures A/c}& & & & 3,20,00,000\\ & \text{(Allotment of 20,00,000 debentures at Rs.200}& & & & \\ & \text{each at 7\% discount with the term of 8\% premium}& & & & \\ & \text{on redemption.)}& & & & \end{array}$