T. Ltd. offered 2,00,000, 8% Debenture of Rs 500 each on June 30, 2002 at a premium of 10% payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3,00,000 debenture and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debenture.

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Solution

Books of T. Ltd.

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

Bank A/c

Dr.

6,00,00,000

To 8% Debenture Application A/c

6,00,00,000

(8% Debenture application money received for 3,00,000

debentures @ Rs 200 each)

8% Debenture Application A/c

Dr.

6,00,00,000

To 8% Debenture A/c

3,00,00,000

To 8% Debenture Allotment A/c

2,00,00,000

To Securities Premium A/c

1,00,00,000

(8% Debenture Application money of 2,00,000 debentures @

Rs 200 each including Rs 50 premium transferred to Debenture Account and rest of the amount adjusted on allotment)

8% Debenture Allotment A/c

Dr.

7,00,00,000

To 8% Debenture A/c

7,00,00,000

(8% Debenture allotment on 2,00,000 debentures @

Rs 350 due)

Bank A/c

Dr.

5,00,00,000

To 8% Debenture Allotment A/c

5,00,00,000

(8% Debenture Allotment money received)

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T Ltd offered 2,00,000, 8% Debentures of Rs.500 each on June 30, 2002 at a premium of 10% payable as Rs. 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3,00,000 debentures and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debenture.

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Books of T. Ltd. Journal
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c		Dr.		6,00,00,000
		To 8% Debenture Application A/c				6,00,00,000
	(8% Debenture application money received for 3,00,000 debentures @ Rs 200 each)

	8% Debenture Application A/c		Dr.		6,00,00,000
		To 8% Debenture A/c				3,00,00,000
		To 8% Debenture Allotment A/c				2,00,00,000
		To Securities Premium A/c				1,00,00,000
	(8% Debenture Application money of 2,00,000 debentures @ Rs 200 each including Rs 50 premium transferred to Debenture Account and rest of the amount adjusted on allotment)

	8% Debenture Allotment A/c		Dr.		7,00,00,000
		To 8% Debenture A/c				7,00,00,000
	(8% Debenture allotment on 2,00,000 debentures @ Rs 350 due)

	Bank A/c		Dr.		5,00,00,000
		To 8% Debenture Allotment A/c				5,00,00,000
	(8% Debenture Allotment money received)