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Gladiators Ltd. issued 10,000; 8% Debentures of ₹100 each at a discount of 5%, redeemable at a premium of 5%, payable along with application. It had a balance of ₹70,000 in Securities Premium Reserve and ₹50,000 in Capital Reserve. The debentures were fully subscribed and the amounts were duly received. Pass the necessary Journal entries for the issue of debentures and for writing off the Loss on Issue of Debentures.
JOURNAL (Books of Gladiators Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 9,50,000 | |||
| To Debenture Application A/c | 9,50,000 | |||
| (Application money received for 10,000 debentures at ₹95 each) | ||||
| Debenture Application A/c Dr. | 9,50,000 | |||
| Discount on Issue of Debentures A/c Dr. | 50,000 | |||
| Loss on Issue of Debentures A/c Dr. | 50,000 | |||
| To 8% Debentures A/c | 10,00,000 | |||
| To Premium on Redemption of Debentures A/c | 50,000 | |||
| (10,000; 8% Debentures of ₹100 each issued at a 5% discount, redeemable at a 5% premium, payable along with application) | ||||
| Securities Premium Reserve A/c Dr. | 70,000 | |||
| Capital Reserve A/c Dr. | 30,000 | |||
| To Discount on Issue of Debentures A/c | 50,000 | |||
| To Loss on Issue of Debentures A/c | 50,000 | |||
| (Discount on Issue of Debentures and Loss on Issue of Debentures written off against Securities Premium Reserve and Capital Reserve) |
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.49 - 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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