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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Pawan Hans Ltd. issued, on 1st July, 2024, 10,000, 7% Debentures of ₹100 each for subscription at a 10% premium, payable ₹40 on application and the balance on allotment. The debentures were subscribed and the due amounts were received. Interest was payable on 31st March each year. Pass the Journal entries for the issue of debentures and interest for the year ended 31st March, 2025, and transfer the interest to the Statement of Profit and Loss.
JOURNAL (Books of Pawan Hans Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 4,00,000 | |||
| To Debenture Application A/c | 4,00,000 | |||
| (Application money received on 10,000 debentures at ₹40 each) | ||||
| Debenture Application A/c Dr. | 4,00,000 | |||
| To 7% Debentures A/c | 4,00,000 | |||
| (Application money transferred to Debentures Account) | ||||
| 7% Debenture Allotment A/c Dr. | 7,00,000 | |||
| To 7% Debentures A/c | 6,00,000 | |||
| To Securities Premium Reserve A/c | 1,00,000 | |||
| (Debenture allotment money due on 10,000 debentures at ₹70 each, including ₹10 premium) | ||||
| Bank A/c Dr. | 7,00,000 | |||
| To 7% Debenture Allotment A/c | 7,00,000 | |||
| (Debenture allotment money received) | ||||
| 31-3-2025 | Debenture Interest A/c Dr. | 52,500 | ||
| To Debenture Holders’ A/c | 52,500 | |||
| (Interest allowed on debentures for 9 months, 1st July, 2024 to 31st March, 2025) | ||||
| 31-3-2025 | Debenture Holders’ A/c Dr. | 52,500 | ||
| To Bank A/c | 52,500 | |||
| (Interest paid) | ||||
| 31-3-2025 | Statement of Profit and Loss A/c Dr. | 52,500 | ||
| To Debenture Interest A/c | 52,500 | |||
| (Debenture interest transferred to the Statement of Profit and Loss) |
Working Note: Value of debentures = 10,000 × ₹100 = ₹10,00,000. 7% interest for nine months (1 July 2024 to 31 March 2025) = (10,00,000 × 7 × 9) ÷ (100 × 12) = ₹52,500.
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.45 - 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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