What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice: (a) when debentures were issued at par with a condition to redeem them at premium; (b) when debentures were issued at premium with a condition to redeem that at par; and (c) when debentures were issued at discount with a condition to redeem them at premium?

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Solution

S.No.

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount Rs

(a)

Debenture A/c

Dr.

Premium on Redemption of Debenture A/c

Dr.

To Debenture Holders A/c

(Amount due for redemption of Debentures)

Debenture Holders A/c

Dr.

To Bank A/c

(Payment made to Debenture Holders)

(b)

Debenture A/c

Dr.

To Debenture Holders A/c

(Amount due for redemption of debentures that were issued at

premium with term of redeemable at par)

Debenture Holders A/c

Dr.

To Bank A/c

(Payment made to Debenture Holders)

(c)

Debenture A/c

Dr.

Premium on Redemption of Debenture A/c

Dr.

To Debentures Holders A/c

(Amount due for redemption on debentures that were issued at

discount with the term of redeemable at premium)

Debenture Holders A/c

Dr.

To Bank A/c

(Payment made to Debenture Holders)

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Similar questions

KTR Ltd, issued 365, 9% Debentures of Rs 1,000 each on 4-3-2016.

Pass necessary Journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at par redeemable at a premium of 10%.

(b) When debentures were issued at 6% discount redeemable at 5% premium.

Pass journal entries in the following cases:
(a) A Co.Ltd. issued ₹40,000; 12% Debentures at a premium of 5% redeemable at par.
(b) A Co.Ltd. issued ₹40,000; 12% Debentures at a discount of 10% redeemable at par.
(c) A Co.Ltd. issued ₹40,000; 12% Debentures at par redeemable at 10% premium.
(d) A Co.Ltd. issued ₹40,000; 12% Debentures at a discount of 5% and redeemable at 5% premium.
(e) A Co.Ltd. issued ₹40,000; 12% Debentures at a premium of 10% redeemable at 110%.

Beeta Ltd, issued 5,000, $9 %$ debentures of Rs 500 each. Pass the necessary journal entries for the issue of Debentures in the books of the company in the following cases:

(i) When debentures are issued at $10 %$ premium and redeemable at par.

(ii) When debentures are issued at par and redeemable at $10 %$ premium.

(iii) When debentures are issued at $5 %$ premium and redeemable at $10 %$ premium.

(iv) When debentures are issued at $25 %$ to the vendors for machinery purchased for Rs 6,25,000.

Give journal entries for the issue of debentures in the following conditions.

I. Issued 2,000, $12 %$ debentures of Rs 100 each at par, redeemable also at par.

II. Issued 2,000, $12 %$ debentures of Rs 100 each at a discount of $12 %$ , redeemable at par.

III. Issued 2,000, $12 %$ debentures of Rs 100 each at a premium of $5 %$ , redeemable at par.

IV. Issued 2,000, $12 %$ debentures of Rs 100 each at par but redeemable at $5 %$ premium.

V. Issued 2,000, $12 %$ debentures of Rs 100 each at a discount of $2 %$ , redeemable at a premium of $5 %$ .

VI. Issued 2,000, $12 %$ debentures of Rs 100 each at a premium of $5 %$ , redeemable at a premium of $10 %$ .

Q. Pass necessary Journal entries for the issue of Debentures in the following cases:
(a) ₹ 40,000; 15% Debentures of ₹ 100 each issued at a discount of 10% redeemable at par.
(b) ₹ 80,000; 15% Debentures of ₹ 100 each issued at a premium of 10% redeemable at a premium of 10%.

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S.No.	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
(a)	Debenture A/c		Dr.
	Premium on Redemption of Debenture A/c		Dr.
		To Debenture Holders A/c
	(Amount due for redemption of Debentures)

	Debenture Holders A/c		Dr.
		To Bank A/c
	(Payment made to Debenture Holders)

(b)	Debenture A/c		Dr.
		To Debenture Holders A/c
	(Amount due for redemption of debentures that were issued at premium with term of redeemable at par)

	Debenture Holders A/c		Dr.
		To Bank A/c
	(Payment made to Debenture Holders)

(c)	Debenture A/c		Dr.
	Premium on Redemption of Debenture A/c		Dr.
		To Debentures Holders A/c
	(Amount due for redemption on debentures that were issued at discount with the term of redeemable at premium)

	Debenture Holders A/c		Dr.
		To Bank A/c
	(Payment made to Debenture Holders)