Question

Sargam Ltd. issued 1,00,000, 6% Debentures of Rs 10 each at a preminum of Rs 2 per debenture on 1st April, 2012. The issue was fully subscribed. Interest will be paid at the end of each financial year. Pass necessary journal entries.

Answer 1

JOURNAL OF SARGAM LTD.
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \text{(Rs)}& \text{(Rs)}\\ 2012& & & & \\ \text{April 1}& \text{Bank A/c}\text{Dr.}& & 12,00,000& \\ & \text{To Debentures Application and Allotment A/c}& & & 12,00,000\\ & \underset{–}{\text{(Being the application money received)}}& & & \\ & \text{Debentures Application and Allotment A/c}\text{Dr.}& & 12,00,000& \\ & \text{To}6\%\text{Debentures A/c}& & & 10,00,000\\ & \text{To Securities Premium Reserve A/c}& & & 2,00,000\\ & \text{(Being application and allotment money transferred to}& & & \\ & \underset{–}{\text{Debentures A/c)}}& & & \\ 2013& & & & \\ \text{March 31}& \text{Debenture Interest A/c}\text{Dr.}& & 60,000& \\ & \text{To Debentureholders A/c}& & & 60,000\\ & \underset{–}{\text{(Being the interest due)}}& & & \\ & \text{Debentureholders A/c}\text{Dr.}& & 60,000& \\ & \text{To Bank A/c}& & & 60,000\\ & \underset{–}{\text{(Being interest paid)}}& & & \\ \text{March 31}& \text{Statement of Profit and Loss A/c}\text{Dr.}& & 60,000& \\ & \text{To Debenture Interest A/c}& & & 60,000\\ & \text{(Being interest transferred to Statement of Profit and}& & & \\ & \text{Loss)}& & & \end{array}$