On 2-3-2016 L and B Ltd issued 635,9% debenture of Rs500 each Pass necessary journal entries for the issue - Accountancy - Issue and Redemption of Debentures

Question

On 2-3-2016 L and B Ltd issued 635,9% debenture of Rs500 each Pass
necessary journal entries for the issue of debentures in the
following situations: (a) When debentures were issued at 5%
discount, redeemable at 10%premium (b) When debentures were issued
at 12% premium, redeemable at 6%premium

Neha Chopra · Accepted Answer

Dear Student

Journal in the books of L and B
ltd

Date
Particulars
L
F
Debit
Amount
(Rs)
Credit
Amount
(Rs)

a)
Bank
A/c (635 x 475)
Dr

3,01,625

Discount on Issue A/c
Dr

15,875

To 9%
Debentures A/c

3,17,500

(Being
Debentures issued at 5 % Discount)

Loss
on issue A/c
Dr

31,750

To
Premium on Redemption A/c (635 x 50)

31,750

(Being
the issued debentures are to be redeemed at 10% premium , so it is
booked)

b)
Bank
A/c (635 x 560)
Dr

3,55,600

To 9%
Debentures A/c

3,17,500

To
Securities Premium A/c

38,100

(Being
Debentures issued at 12 % Premium)

Loss
on issue A/c
Dr

19,050

To
Premium on Redemption A/c (635 x 30)

19,050

(Being
the issued debentures are to be redeemed at 6% premium , so it is
booked)

Regards

Journal in the books of L and B ltd .
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
a)	Bank A/c (635 x 475)	Dr.		3,01,625
	Discount on Issue A/c	Dr.		15,875
	To 9% Debentures A/c				3,17,500
	(Being Debentures issued at 5 % Discount)

	Loss on issue A/c	Dr.		31,750
	To Premium on Redemption A/c (635 x 50)				31,750
	(Being the issued debentures are to be redeemed at 10% premium , so it is booked)

b)	Bank A/c (635 x 560)	Dr.		3,55,600
	To 9% Debentures A/c				3,17,500
	To Securities Premium A/c				38,100
	(Being Debentures issued at 12 % Premium)

	Loss on issue A/c	Dr.		19,050
	To Premium on Redemption A/c (635 x 30)				19,050
	(Being the issued debentures are to be redeemed at 6% premium , so it is booked)

On 2-3-2016 L and B Ltd. issued 635,9% debenture of Rs500 each Pass necessary journal entries for the issue of debentures in the following situations: (a) When debentures were issued at 5% discount, redeemable at 10%premium (b) When debentures were issued at 12% premium, redeemable at 6%premium.