Vijay Laxmi Ltd. invited applications for 10,000; 12% Debentures of ₹ 100 each at a premium of ₹ 70 per debenture .The full amount was payable on application.
Applications were received for 13,500 debentures. Applications for 3,500 debentures were rejected and application money was refunded . Debentures were allotted to the remaining applications .

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Solution

In the Books of Vijay Laxmi Ltd.

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

Bank A/c

Dr.

22,95,000

To Debenture Application and Allotment A/c

22,95,000

(Application money received on 13,500 12% debenture)

Debenture Application and Allotment A/c

Dr.

22,95,000

To 12% Debentures A/c

10,00,000

To Securities Premium Reserve A/c

7,00,000

To Bank A/c

5,95,000

(10,000; 12% Debentures issued at a premium of Rs 70 and excess money refunded)

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In the Books of Vijay Laxmi Ltd. Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		22,95,000
	To Debenture Application and Allotment A/c				22,95,000
	(Application money received on 13,500 12% debenture)

	Debenture Application and Allotment A/c	Dr.		22,95,000
	To 12% Debentures A/c				10,00,000
	To Securities Premium Reserve A/c				7,00,000
	To Bank A/c				5,95,000
	(10,000; 12% Debentures issued at a premium of Rs 70 and excess money refunded)