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Question -

T. Ltd. offered 2,00,000, 8% debenture of ₹ 500 each on June 30, 2014 at a premium of 10% payable as ₹ 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3, 00,000 debentures and the allotment is made on pro-rata basis. All the money due on application and allotment is received. Record necessary entries regarding issue of debentures.



Answer -

Books of T. Ltd.

Journal

DateParticularsL.F.Debit

Amount

(₹)

Credit

Amount

(₹)

2014
Jun. 30Bank A/cDr.6,00,00,000
To 8% Debenture Application A/c6,00,00,000
(8% Debenture application money received for 3,00,000

debentures @ ₹200 each)

Jun.308% Debenture Application A/cDr.6,00,00,000
To 8% Debenture A/c3,00,00,000
To 8% Debenture Allotment A/c2,00,00,000
To Securities Premium A/c1,00,00,000
(8% Debenture Application money of 2,00,000 debentures @

₹200 each including ₹50 premium transferred to Debenture Account and rest of the amount adjusted on allotment)

8% Debenture Allotment A/cDr.7,00,00,000
To 8% Debenture A/c7,00,00,000
(8% Debenture allotment on 2,00,000 debentures @

₹350 due)

Bank A/cDr.5,00,00,000
To 8% Debenture Allotment A/c5,00,00,000
(8% Debenture Allotment money received)

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