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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Global Ltd. issued 10,000, 8% Debentures of ₹100 each, redeemable in four equal instalments by draw of lots from the end of 3 years, at a premium of ₹9. Pass the Journal entries for writing off the Loss on Issue of Debentures. Also prepare the Loss on Issue of Debentures Account.
JOURNAL (Books of Global Ltd.)
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| By the end of the year of allotment | Statement of Profit and Loss A/c Dr. | 90,000 | ||
| To Loss on Issue of Debentures A/c | 90,000 | |||
| (Loss on issue of debentures written off) |
LOSS ON ISSUE OF DEBENTURES ACCOUNT
| Particulars | ₹ | Particulars | ₹ |
|---|---|---|---|
| On the date of issue — To 8% Debentures A/c | 90,000 | By the end of the year of allotment — By Statement of Profit and Loss A/c | 90,000 |
| Total | 90,000 | Total | 90,000 |
Working Note: Premium on redemption = 10,000 × ₹9 = ₹90,000 (no discount on issue is involved here, so the entire loss consists of the redemption premium).
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.52 - 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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