X.Ltd. issued 5,000, 15% debentures of Rs.100 each on April 01, 2013 at a discount of 10%, redeemable at a premium of 10% in equal annual drawings in 4 years out of capital.

Give journal entries both at the time of issue and redemption of debentures. (Ignore the treatment of loss on issue of debentures and interest.)

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Solution

Books of X. Ltd.

Journal

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

2013

Apr 1

Bank A/c

Dr.

4,50,000

To Debenture Application and Allotment A/c

4,50,000

(Application and allotment money received for 5,000

15% Debentures @ Rs 90 each )

Debenture Application and Allotment A/c

Dr.

4,50,000

Loss on Issue of Debenture A/c

Dr.

1,00,000

To 15% Debentures A/c

5,00,000

To Premium on Issue of Debentures

50,000

(5,000 15% Debentures @ Rs 100 each with the term

of 10% discount on issue and repayable at 10%

premium allotted)

Mar 31

15% Debenture A/c

Dr.

1,25,000

Premium on Redemption of Debentures A/c

Dr.

12,500

To Debentureholders

1,37,500

(1250 15% Debentures @ Rs100 each due for

redemption at 10% premium)

Debentureholders

Dr.

1,37,500

To Bank A/c

1,37,500

(Amount paid to debentureholders)

2014

Mar 31

15% Debenture A/c

Dr.

1,25,000

Premium on Redemption of Debentures A/c

Dr.

12,500

To Debentureholders

1,37,500

(1250 15% Debentures @ Rs100 each due for

redemption at 10% premium)

Debentureholders

Dr.

1,37,500

To Bank A/c

1,37,500

(Amount paid to debentureholders)

2015

Mar 31

15% Debenture A/c

Dr.

1,25,000

Premium on Redemption of Debentures A/c

Dr.

12,500

To Debentureholders

1,37,500

(1250 15% Debentures @ Rs100 each due for

redemption at 10% premium)

Debentureholders

Dr.

1,37,500

To Bank A/c

1,37,500

(Amount paid to debentureholders)

2016

Mar 31

15% Debenture A/c

Dr.

1,25,000

Premium on Redemption of Debentures A/c

Dr.

12,500

To Debentureholders

1,37,500

(1250 15% Debentures @ Rs100 each due for

redemption at 10% premium)

Debentureholders

Dr.

1,37,500

To Bank A/c

1,37,500

(Amount paid to debentureholders)

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Similar questions

X Ltd issued 5,000 $15 %$ debentures of Rs 100 each on January 01, 2004 at a discount of $10 %$ redeemable at a premium of $10 %$ in equal annual drawings in 4 years out of capital.
Give journal entries both at the time of issue and redemption of debentures. (Ignore the treatment of loss on issue of debentures and interest.)

Q. On 1st April, 2013, ABC Ltd. issued 10,000 , 10% Debentures of ₹ 100 each at a discount of 4% redeemable after 5 years at a premium of 6% .
Pass the necessary journal entries for issue of debentures and writing off Loss on issue of Debentures. Also prepare Loss on issue of Debentures Account.

Tulip Ltd. issued Rs 4,00,000 $9 %$ Debentures of Rs 100 each on April 1,2014 at a premium of $6 %$ redeemable at a premium of $10 %$ on 31st March, 2018. Assume that required investment was made in $10 %$ Government Securities on April 30 of the financial year in which redemption is due. Debentures were redeemed on the due date.

Pass journal entries at the time of Issue and Redemption of Debentures.

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 $10 %$ .

B. Ltd. issued 1,000, 12% debentures of Rs 100 each on April 01, 2014 at a discount of 5% redeemable at a premium of 10%.

Give journal entries relating to the issue of debentures and debentures interest for the period ending March 31, 2015 assuming that interest is paid half yearly on September 30 and March 31 and tax deducted at source is 10%.

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Books of X. Ltd. Journal
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
2013
Apr 1	Bank A/c		Dr.		4,50,000
		To Debenture Application and Allotment A/c				4,50,000
	(Application and allotment money received for 5,000 15% Debentures @ Rs 90 each )

	Debenture Application and Allotment A/c		Dr.		4,50,000
	Loss on Issue of Debenture A/c		Dr.		1,00,000
		To 15% Debentures A/c				5,00,000
		To Premium on Issue of Debentures				50,000
	(5,000 15% Debentures @ Rs 100 each with the term of 10% discount on issue and repayable at 10% premium allotted)

Mar 31	15% Debenture A/c		Dr.		1,25,000
	Premium on Redemption of Debentures A/c		Dr.		12,500
		To Debentureholders				1,37,500
	(1250 15% Debentures @ Rs100 each due for redemption at 10% premium)

	Debentureholders		Dr.		1,37,500
		To Bank A/c				1,37,500
	(Amount paid to debentureholders)

2014
Mar 31	15% Debenture A/c		Dr.		1,25,000
	Premium on Redemption of Debentures A/c		Dr.		12,500
		To Debentureholders				1,37,500
	(1250 15% Debentures @ Rs100 each due for redemption at 10% premium)

	Debentureholders		Dr.		1,37,500
		To Bank A/c				1,37,500
	(Amount paid to debentureholders)

2015
Mar 31	15% Debenture A/c		Dr.		1,25,000
	Premium on Redemption of Debentures A/c		Dr.		12,500
		To Debentureholders				1,37,500
	(1250 15% Debentures @ Rs100 each due for redemption at 10% premium)

	Debentureholders		Dr.		1,37,500
		To Bank A/c				1,37,500
	(Amount paid to debentureholders)

2016
Mar 31	15% Debenture A/c		Dr.		1,25,000
	Premium on Redemption of Debentures A/c		Dr.		12,500
		To Debentureholders				1,37,500
	(1250 15% Debentures @ Rs100 each due for redemption at 10% premium)

	Debentureholders		Dr.		1,37,500
		To Bank A/c				1,37,500
	(Amount paid to debentureholders)