Question

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.

Answer 1

$\text{Journal Entries}$
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{LF}& \text{Amt.(Dr)}& \text{Amt.(Cr)}\\ \left(i\right)& \text{Bank A/c}Dr& & 6,00,00,000& \\ & \text{To 8\% Debenture Application A/c}& & & 6,00,00,000\\ & \text{(8\% debenture application money}& & & \\ & \text{received for 3,00,000 debentures at Rs 200 each)}& & & \\ & \underset{–}{}& & & \\ \left(ii\right)& \text{8\% Debenture Application A/c}Dr& & 6,00,00,000& \\ & \text{To 8\% Debenture A/c}(2,00,000\times 150)& & & 3,00,00,000\\ & \text{To 8\% Debenture Allotment A/c}(1,00,000\times 200)& & & 2,00,00,000\\ & \text{To Securities Premium A/c}(2,00,000\times 50)& & & 1,00,00,000\\ & \text{(8\% debenture application money of}& & & \\ & \text{2,00,000 debentures at Rs 200 each including}& & & \\ & \text{Rs 50 premium transferred to debentures account}& & & \\ & \text{and rest of the amount adjusted on allotment)}& & & \\ & \underset{–}{}& & & \\ \left(iii\right)& \text{Bank A/c}Dr& & 5,00,00,000& \\ & \text{To 8\% Debenture Allotment A/c}& & & 5,00,00,000\\ & \text{(8\% debenture allotment on 2,00,000}& & & \\ & \text{debentures received)}& & & \\ & \underset{–}{}& & & \\ \left(iv\right)& \text{8\% Debenture Allotment A/c}Dr& & 7,00,00,000& \\ & \text{To 8\% Debenture A/c}& & & 7,00,00,000\\ & \text{(8\% debenture allotment money}& & & \\ & \text{transferred to debentures account)}& & & \end{array}$