Journal Entries DateParticularsLFAmt. (Dr)Amt. (Cr)12%Debenture A/cDr2,00,000 To Debenture Holders A/cDr1,90,000 To Discount on Issue of Debentures A/c10,000(Amount of debentures due to debentureholders)Debenture Holders A/cDr1,90,000 To Equity Share Capital A/c(15,200×10)1,52,000 To Securities Premium A/c(15,200×2.50)38,000(15,200 equity shares at Rs 10 each at 25%premium issued to debenture holders in lieu of debentures)
Note If the debentures are converted before the date of maturity then the net proceeds (collection) from issue of debentures will be taken on conversion as assumed in this question.
Number of shares to be issueded = 1,90,00012.50=15,200 shares