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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Sujata Ltd. invited applications for issuing 50,000, 9% Debentures of ₹100 each at a discount of 10%, redeemable at par after 5 years. The debentures were fully subscribed and all money was duly received. The company had a balance of ₹3,00,000 in Securities Premium, which it decided to use for writing off the discount/loss on issue of debentures. It also decided to write off the remaining discount/loss on issue of debentures in the first year. Pass the Journal entries for the issue of debentures and for writing off the discount/loss on issue of debentures. (CBSE 2020)
JOURNAL (Books of Sujata Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Bank A/c Dr. | 45,00,000 | |||
| To Debenture Application and Allotment A/c | 45,00,000 | |||
| (Application money received for 50,000 debentures) | ||||
| Debenture Application and Allotment A/c Dr. | 45,00,000 | |||
| Discount on Issue of Debentures A/c Dr. | 5,00,000 | |||
| To 9% Debentures A/c | 50,00,000 | |||
| (50,000; 9% Debentures of ₹100 each issued at a 10% discount, redeemable at par) | ||||
| Securities Premium Reserve A/c Dr. | 3,00,000 | |||
| Statement of Profit and Loss A/c Dr. | 2,00,000 | |||
| To Discount on Issue of Debentures A/c | 5,00,000 | |||
| (Discount on issue of debentures written off, partly against Securities Premium Reserve and the remainder against the Statement of Profit and Loss in the first year) |
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.50 - 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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