Question 28 Chapter 9 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 28 Chapter 9 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 28 Chapter 9 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

28. (Different cases of Issue of Debentures) Give journal entries in each of the following at Rs. 100.alternative cases assuming the face value of a debenture being Rs. 100.
A 12% debenture issued at Rs. 100 repayable at Rs. 100.
(b) A 12% debenture issued at Rs. 95 repayable at Rs. 100.
(c) A 12% debenture issued at Rs. 105 repayable at Rs. 100.
(d) A 12% debenture issued at Rs. 100 repayable at Rs. 105.
(e) A 12% debenture issued at Rs. 95 repayable at Rs.105.
(f) A 12% debenture issued at Rs. 105 repayable at Rs 110.

The solution of Question 28 Chapter 9 of +2 Part-1: –

Journal
Date   Particulars
L.F. Debit ₹ Credit ₹
  Bank A/c Dr.   100  
  To Debenture Application & allotment A/c       100
  (Being receipt of debenture money received)      
         
  Debenture Application & Allotment A/c Dr.   100  
  To 12% Debenture A/c     100
  (Being issue of debentures at par)      
         
  Bank A/c Dr.   95  
  To Debenture Application & Allotment A/c     95
  (Being receipt debentures money )      
         
  Debenture Application & Allotment A/c Dr.   95  
  Discount on issue of Debentures A/c Dr.   5  
  To 10% Debenture A/c     100
  (Being issue of debentures at par redeemable at 10 % premium)      
         
  Bank A/c Dr.   105  
  To Debenture Application & Allotment A/c     105
  (Being receipt debentures app. Money)      
         
  Debenture Application & Allotment A/c Dr.   105  
  To 12% Debenture A/c     100
  To Premium on Redemption of Debentures A/c     5
  (Being issue of debentures at discount repayable at premium )      
         
  Bank A/c Dr.   100  
  To Debenture Application & Allotment A/c     100
  (Being receipt debentures app. Money )      
         
  Debenture Application & Allotment A/c Dr.   100  
  Loss on issue of Debentures A/c Dr.   5  
  To 12% Debenture A/c     100
  To Premium on redemption of debentures A/c     5
  (Being the issue of debentures at par but redeemable at 5% prepium)      
         
  Bank A/c Dr.   95  
  To Debenture Application & Allotment A/c     95
  (Being the receipt of Debenture Application Money)      
         
  Debenture Application & Allotment A/c Dr.   95  
  Loss on issue of Debentures A/c Dr.   10  
  To 12% Debenture A/c     100
  To Premium on redemption of debentures A/c     5
  (Being issue of debentures at premium redeemable at par)      
         
  Bank A/c Dr.   105  
  To Debenture Application & Allotment A/c     105
  (Being subscription amount received )      
         
  Debenture Application & Allotment A/c Dr.   105  
  Loss on issue of Debentures A/c Dr.   10  
  To 12% Debenture A/c       100
  To Securities Premium Reserve A/c       5
  To Premium on redemption of debentures A/c       10
  (Being issue of debentures at 5 % discount which are redeemable at 10% premium )      

Note : According to prudence & realisation concepts the latter discount (which id to be materialize on redemption ) being an unrealised gain should not be taken into account at the tom od issue & allotment of debentures.

It all about Question 28 Chapter 9 of +2-Part-1, If you have any problem please comment below.

Issue of Debentures from the point of view of Redemption

You can also Check out the solved question of other Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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