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Question 43 Chapter 9 of +2-A
43. Kitply Ltd.issued Rs 2,00,000, 10% Debentures at a discount of 5% .The terms of issue provide the repayment at the end of 4 years. Kitply Ltd.has a balance of Rs 5,00,000 in Securities Premium Reserve. The company decided to write off discount on issue of debentures from Securities Premium Reserve in the first year.
Pass the journal entry.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| Security Premium Reserve A/c | Dr | 10,000 | |||
| To Discount on issue of Debentures A/c | 10,000 | ||||
| (Being a discount issue of debenture written off ) | |||||
Working Note
Discount on issue of Debentures = 2,00,000×5% = Rs 10,000
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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