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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Nipa Ltd. issued 10,000 Debentures of ₹100 each (total value ₹10,00,000) at a premium of 10%, payable 25% on application (including premium), and the balance on allotment. The debentures were fully applied for and the amount was duly received. You are required to give Journal entries and prepare the Cash Book.
Face Value of Debenture = ₹100. Premium (₹100 × 10%) = ₹10. Issue Price = ₹110.
On Application (25%) = ₹25, including premium of ₹10 (i.e. ₹15 face + ₹10 premium). On Allotment (85%) = ₹85 per debenture.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Debenture Application A/c Dr. | 2,50,000 | |||
| To Debentures A/c | 1,50,000 | |||
| To Securities Premium Reserve A/c | 1,00,000 | |||
| (Debenture application money received for 10,000 debentures at ₹25 each, including premium of ₹10, transferred to Debentures Account) | ||||
| Debenture Allotment A/c Dr. | 8,50,000 | |||
| To Debentures A/c | 8,50,000 | |||
| (Debenture allotment due on 10,000 debentures at ₹85 each) |
CASH BOOK
| Dr. Particulars | ₹ |
|---|---|
| Debenture Application | 2,50,000 |
| Debenture Allotment | 8,50,000 |
| Total | 11,00,000 |
| Cr. Particulars | ₹ |
| Balance c/d | 11,00,000 |
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.6 - 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.
You can take our custom-built interactive practice quiz directly on this page to test your understanding of "T.S. Grewal Class 12 Vol 2 Chapter 2 Q.6 - Issue of Debentures" instantly.