Question 41 Chapter 9 of +2-A - T.S. Grewal 12 Class

Question 41 Chapter 9 of +2-A

Table of Contents

The solution of Question 41 Chapter 9 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

41. Bright Ltd. issued 5,000; 10% Debentures of 􀀀 100 each on 1st April, 2015 . The issue was fully subscribed . According to the terms of issue, interest on the debentures is payable half-yearly on 30th September and 31st March and the tax deducted at source is 10%.
Pass necessary journal entries related to the debenture interest for the year ending 31st March , 2016 and transfer of interest on debentures of the year to the Statement of Profit and Loss .

The solution of Question 41 Chapter 9 of +2-A: –

Date	Particulars		L.F.	Debit	Credit
2016
31 Mar	Debenture interest A/c	Dr		25,000
	To Debenture Holder’s A/c				22,500
	To Income Tax payable A/c				2,500
	(Being Debenture interest due )
	Debenture Holder’s A/c	Dr		25,000
	Income Tax payable A/c	Dr		25,000
	To Bank A/c				50,000
	(Being interest o debenture paid)
31 Mar	Statement of Profit & Loss A/c	Dr		50,000
	To Debenture Interest A/c				50,000
	(Being Debenture interest transferred to profit and loss )