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Accountancy · 2024 · 6 marks
CBSE 2024 · Region 4 · Set 2 · Q26
Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Dhatu Ltd. in…
Pass necessary journal entries relating to issue of debentures and to write off discount/loss on issue of debentures in the books of Dhatu Ltd. in the following cases : (i) $\displaystyle 400$, $\displaystyle 11$% debentures of ₹ $\displaystyle 1{,}000$ each are issued at $\displaystyle 10$% discount and redeemable at par. Balance in Securities Premium Account is ₹ $\displaystyle 50$,000. (ii) $\displaystyle 500$, $\displaystyle 10$% debentures of ₹ $\displaystyle 1{,}000$ each are issued at $\displaystyle 10$% discount and redeemable at a premium of $\displaystyle 10$%. Balance in Securities Premium Account is ₹ $\displaystyle 75$,000.
Marking-scheme solution
Books of Dhatu Ltd.
Journal
Dat Particulars L. Debit Credit
e F Amount Amount
(₹)
(₹)
(i) Bank A/c Dr $\displaystyle 3{,}60{,}000$
To Debenture Application and Allotment $\displaystyle 3{,}60{,}000$
A/c
(Application money on $\displaystyle 11$% Debentures
received)
Debenture Application and Allotment A/c Dr $\displaystyle 3{,}60{,}000$
Discount on issue of Debentures A/c Dr $\displaystyle 40{,}000$
$\displaystyle 4{,}00{,}000$
To $\displaystyle 11$% Debentures A/c
(Debentures application money transferred
to $\displaystyle 11$% Debentures Account)
Securities Premium A/c Dr $\displaystyle 40{,}000$
To Discount on issue of Debentures A/c $\displaystyle 40{,}000$
(Discount on issue of debentures written off)
(ii)
Bank A/c Dr $\displaystyle 4{,}50{,}000$
To Debenture Application and Allotment $\displaystyle 4{,}50{,}000$
A/c
(Application money on $\displaystyle 10$% Debentures
received)
Debenture Application and Allotment A/c Dr $\displaystyle 4{,}50{,}000$
Loss on issue of Debentures A/c Dr $\displaystyle 1{,}00{,}000$
To $\displaystyle 10$% Debentures A/c
$\displaystyle 5{,}00{,}000$
To Premium on redemption of
$\displaystyle 50{,}000$
Debentures A/c
(Debentures application money transferred
to $\displaystyle 10$% Debentures A/c)
Alternatively
Debenture Application and Allotment A/c Dr $\displaystyle 4{,}50{,}000$
Discount on issue of Debentures A/c Dr $\displaystyle 50{,}000$
Loss on issue of Debentures A/c Dr $\displaystyle 50{,}000$
To $\displaystyle 10$% Debentures A/c $\displaystyle 5{,}00{,}000$
To Premium on redemption of Debentures $\displaystyle 50{,}000$
A/c
(Debentures application money transferred
to $\displaystyle 10$% Debentures A/c )
Securities Premium A/c Dr $\displaystyle 75{,}000$
$\displaystyle 25{,}000$
Statement of Profit & Loss Dr
To Loss on issue of Debentures A/c $\displaystyle 1{,}00{,}000$
(Loss on issue of debentures written off)
Alternatively
Securities Premium A/c Dr $\displaystyle 75{,}000$
Statement of Profit & Loss Dr $\displaystyle 25{,}000$
To Discount on issue of Debentures A/c $\displaystyle 50{,}000$
To Loss on issue of Debentures A/c $\displaystyle 50{,}000$
(Loss on issue of debentures written off)
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