Z.Ltd. issued 2,000, 14% 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 profits.
Give journal entries both at the time of issue and redemption of debentures. (Ignore the treatment of loss on issue of debentures and interest.)
Books of Z. Ltd.
Journal
|
|||||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|||
2013 |
|
|
|
|
|
||
Apr. 1 |
Bank A/c |
Dr. |
|
1,80,000 |
|
||
|
|
To Debenture Application and Allotment A/c |
|
|
1,80,000 |
||
|
(Debenture Application and Allotment money received for 2,000 14% Debentures of Rs 100 at Rs 90 each) |
|
|
|
|||
|
|
|
|
|
|||
|
Debenture Application and Allotment A/c |
Dr. |
|
1,80,000 |
|
||
|
Loss on Issue of Debentures A/c |
Dr. |
|
40,000 |
|
||
|
|
To 14% Debentures A/c |
|
|
2,00,000 |
||
|
|
To Premium on Issue of Debentures A/c |
|
|
20,000 |
||
|
(2000 14% Debentures @ Rs 100 each allotted with the term of 10 % discount on issue and repayable at 10% premium) |
|
|
|
|||
|
|
|
|
|
|||
Mar. 31 |
Profit and Loss Appropriation A/c |
Dr. |
|
2,00,000 |
|
||
|
|
To Debentures Redemption Reserve A/c |
|
|
2,00,000 |
||
|
(Profit transferred to Debentures Redemption Reserve) |
|
|
|
|||
|
|
|
|
|
|
|
|
|
14% Debentures A/c |
Dr. |
|
50,000 |
|
||
|
Premium on Redemption of Debentures A/c |
Dr. |
|
5,000 |
|
||
|
|
To Debenture Holders A/c |
|
|
55,000 |
||
|
(Amount due for redemption of debentures) |
|
|
|
|||
|
|
|
|
|
|||
|
Debenture Holders A/c |
Dr. |
|
55,000 |
|
||
|
|
To Bank A/c |
|
|
55,000 |
||
|
(Amount of 500 14% Debentures paid to Debenture Holders) |
|
|
|
|||
|
|
|
|
|
|
|
|
2014 Mar. 31 |
14% Debentures A/c |
Dr. |
|
50,000 |
|
||
|
Premium on Redemption of Debentures A/c |
Dr. |
|
5,000 |
|
||
|
|
To Debenture Holders A/c |
|
|
55,000 |
||
|
(Amount due for redemption of Debentures) |
|
|
|
|||
|
|
|
|
|
|||
|
Debenture Holders A/c |
Dr. |
|
55,000 |
|
||
|
|
To Bank A/c |
|
|
55,000 |
||
|
(Amount of 500 14% Debentures paid to Debenture Holders) |
|
|
|
|||
|
|
|
|
|
|
|
|
2015 Mar. 31 |
14% Debentures A/c |
Dr. |
|
50,000 |
|
||
|
Premium on Redemption of Debentures A/c |
Dr. |
|
5,000 |
|
||
|
|
To Debenture Holders A/c |
|
|
55,000 |
||
|
(Amount due for redemption of debentures) |
|
|
|
|||
|
|
|
|
|
|||
|
Debenture Holders A/c |
Dr. |
|
55,000 |
|
||
|
|
To Bank A/c |
|
|
55,000 |
||
|
(Amount of 500 14% Debentures paid to Debenture Holders) |
|
|
|
|||
|
|
|
|
|
|
|
|
2016 Mar. 31 |
14% Debentures A/c |
Dr. |
|
50,000 |
|
||
|
Premium on Redemption of Debentures A/c |
Dr. |
|
5,000 |
|
||
|
|
To Debenture Holders A/c |
|
|
55,000 |
||
|
(Amount due for redemption of debentures) |
|
|
|
|||
|
|
|
|
|
|||
|
Debenture Holders A/c |
Dr. |
|
55,000 |
|
||
|
|
To Bank A/c |
|
|
55,000 |
||
|
(Amount of 500 14% Debentures paid to Debenture Holders) |
|
|
|
|||
|
|
|
|
|