Please give the accounting treatment
1. When debentures are purchased at a price below nominal value of debentures
2. When debentures are purchased for immediate cancellation
Purchase of debenture below nominal value is simply issue of debenture at a discount. Following is the Accounting Treatment for the issue of debenture at discount.
Date | Particulars | L.F. | Debit Amount (Rs) | Credit Amount (Rs) | |
| Bank A/c | Dr. |
| Purchase Price |
|
| To Debenture Application A/c |
|
| Purchase Price | |
| (Debentures issued at discount) |
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| Debenture Application A/c | Dr. |
| Purchase Price |
|
| Discount on Issue of Debenture A/c | Dr. |
| Discount Price |
|
| To Debenture A/c |
|
| Face Value | |
| (Amount adjusted on allotment) |
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Topic “Purchase of Debenture for immediate cancellation” have been deleted from CBSE Class XII syllabus from Academic Year 2012-13 onwards.