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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Pratham Ltd. issued 50,000, 9% Debentures of ₹100 each on 1st April, 2024, at a 10% discount, redeemable at a ₹10 premium. Interest is payable quarterly, on 30th June, 30th September, 31st December, and 31st March. Pass the Journal entries for interest for the year ended 31st March, 2025.
JOURNAL (Books of Pratham Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 30-6-2024 | Debenture Interest A/c Dr. | 1,12,500 | ||
| To Debenture Holders’ A/c | 1,12,500 | |||
| (Interest allowed on debentures for the quarter) | ||||
| 30-6-2024 | Debenture Holders’ A/c Dr. | 1,12,500 | ||
| To Bank A/c | 1,12,500 | |||
| (Interest paid) | ||||
| 30-9-2024 | Debenture Interest A/c Dr. | 1,12,500 | ||
| To Debenture Holders’ A/c | 1,12,500 | |||
| (Interest allowed on debentures for the quarter) | ||||
| 30-9-2024 | Debenture Holders’ A/c Dr. | 1,12,500 | ||
| To Bank A/c | 1,12,500 | |||
| (Interest paid) | ||||
| 31-12-2024 | Debenture Interest A/c Dr. | 1,12,500 | ||
| To Debenture Holders’ A/c | 1,12,500 | |||
| (Interest allowed on debentures for the quarter) | ||||
| 31-12-2024 | Debenture Holders’ A/c Dr. | 1,12,500 | ||
| To Bank A/c | 1,12,500 | |||
| (Interest paid) | ||||
| 31-3-2025 | Debenture Interest A/c Dr. | 1,12,500 | ||
| To Debenture Holders’ A/c | 1,12,500 | |||
| (Interest allowed on debentures for the quarter) | ||||
| 31-3-2025 | Debenture Holders’ A/c Dr. | 1,12,500 | ||
| To Bank A/c | 1,12,500 | |||
| (Interest paid) | ||||
| 31-3-2025 | Statement of Profit and Loss A/c Dr. | 4,50,000 | ||
| To Debenture Interest A/c | 4,50,000 | |||
| (Debenture interest for the year transferred to the Statement of Profit and Loss) |
Working Note: Quarterly interest = 50,000 × ₹100 × 9% ÷ 4 = ₹1,12,500. Annual interest = 4 × 1,12,500 = ₹4,50,000.
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.
This guide covers "T.S. Grewal Class 12 Vol 2 Chapter 2 Q.42 - Issue of Debentures", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 2 - Issue of Debentures.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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