Q Ltd invited applications for issuing 1,000, 9% debentures of Rs 100 each at a discount of 6% - Accountancy - Issue and Redemption of Debentures

Question

Q Ltd invited applications for issuing 1,000, 9% debentures of Rs
100 each at a discount of 6% Applications of 1,200 debentures were
received Pro-rata allotment was made to all applicants Pass
necessary journal entries for the issue of debentures assuming that
the whole amount was payable with applications

Neha Arora · Accepted Answer

Dear Student,

The journal entries are given below

Journal

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

Bank A/c
Dr

1,12,800

To Debenture Application and Allotment
A/c

1,12,800

(Application money received from 1,200 9%
Debentures of Rs 100 each issued at a discount of
6%)

Debenture Application and Allotment
A/c
Dr

1,12,800

Discount on Issue of Debentures
A/c
Dr

6,000

To 9% Debentures A/c

1,00,000

To Bank A/c

18,800

(Application money on 1,000 9% Debentures
transferred to Debentures A/c and refunded to 200
Debentures)

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


	Bank A/c	Dr.		1,12,800
	To Debenture Application and Allotment A/c				1,12,800
	(Application money received from 1,200 9% Debentures of Rs 100 each issued at a discount of 6%)

	Debenture Application and Allotment A/c	Dr.		1,12,800
	Discount on Issue of Debentures A/c	Dr.		6,000
	To 9% Debentures A/c				1,00,000
	To Bank A/c				18,800
	(Application money on 1,000 9% Debentures transferred to Debentures A/c and refunded to 200 Debentures)