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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
On 1st April, 2024, V.V.L. Ltd. issued 1,000, 9% Debentures of ₹100 each at a discount of 6%, redeemable at a premium of 10% after three years. Pass the necessary Journal entries for the issue of debentures, and for debenture interest for the year ended 31st March, 2025, assuming that interest is payable on 30th September and 31st March, and the rate of tax deducted at source is 10%. The company closes its books on 31st March every year.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2024 Apr. 01 | Bank A/c Dr. | 94,000 | ||
| To Debenture Application and Allotment A/c | 94,000 | |||
| (Money received on the issue of debentures) | ||||
| Debenture Application and Allotment A/c Dr. | 94,000 | |||
| Loss on Issue of Debentures A/c Dr. | 16,000 | |||
| To 9% Debentures A/c | 1,00,000 | |||
| To Premium on Redemption of Debentures A/c | 10,000 | |||
| (Debenture application and allotment money transferred to Debentures Account; Loss on Issue combines the 6% discount and the 10% redemption premium) | ||||
| Sept. 30 | Debenture Interest A/c Dr. | 4,500 | ||
| To Debenture Holders’ A/c | 4,050 | |||
| To TDS Payable A/c | 450 | |||
| (Interest due for the half year, less 10% tax deducted at source) | ||||
| Debenture Holders’ A/c Dr. | 4,050 | |||
| To Bank A/c | 4,050 | |||
| (Payment of interest) | ||||
| TDS Payable A/c Dr. | 450 | |||
| To Bank A/c | 450 | |||
| (Payment of tax) | ||||
| 2025 Mar. 31 | Debenture Interest A/c Dr. | 4,500 | ||
| To Debenture Holders’ A/c | 4,050 | |||
| To TDS Payable A/c | 450 | |||
| (Interest due for the half year, less 10% tax deducted at source) | ||||
| Debenture Holders’ A/c Dr. | 4,050 | |||
| To Bank A/c | 4,050 | |||
| (Payment of interest) | ||||
| TDS Payable A/c Dr. | 450 | |||
| To Bank A/c | 450 | |||
| (Payment of tax) |
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.44 - 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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