If the whole amount of debenture is received in one installment- then the journal entry for application of money is-Debit Debenture application allotment a-c- and credit bank a-cBoth -A- and -B-Debit Bank a-c- and Credit Debenture application allotment a-c-None of the above

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Byju's Answer

Standard XII

Accountancy

Preparation of Statement of Profit and Loss

If the whole ...

Question

If the whole amount of debenture is received in one installment, then the journal entry for application of money is:

Debit Bank a/c. and Credit Debenture application & allotment a/c.

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Debit Debenture application & allotment a/c. and credit bank a/c

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Both (A) and (B)

No worries! We‘ve got your back. Try BYJU‘S free classes today!

None of the above

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Debit Bank a/c. and Credit Debenture application & allotment a/c.
Debentures may be issued at par, premium, or at discount. They can also be issued for consideration other than cash or as collateral security. Debentures are said to be issued at par when face value equals to the issue price of the debenture, the journal entry for such issue is as under:
If whole amount is received in one installment:

Bank A/c Dr.
To Debenture application and allotment A/c

Debenture application and allotment A/c Dr.
To Debentures A/c

Suggest Corrections

Similar questions

Q. If the whole amount of debenture is received in one installment, then the journal entry for making the allotment is:

T. Ltd. offered 2,00,000, 8% Debenture of Rs 500 each on June 30, 2002 at a premium of 10% payable as Rs 200 on application (including premium) and balance on allotment, redeemable at par after 8 years. But application are received for 3,00,000 debenture 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 debenture.

T Ltd offered 2,00,000, 8% Debentures of Rs.500 each on June 30, 2002 at a premium of 10% payable as Rs. 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 debenture.

XYZ Ltd has issued 20,000 debentures at Rs.100 each per debenture for a four-year term. But the public has only subscribed to 16,000 debentures. Rs.40 is collected at application stage and Rs.60 upon allotment. At application stage, the Bank A/c is debited with what amount?

XYZ Ltd has issued 20,000 debentures at Rs.100 each per debenture for a four-year term. But the public has only subscribed to 18,000 debentures. Rs.30 is collected at application stage and Rs.70 upon allotment. At allotment stage, the Bank A/c is debited with what amount?

Join BYJU'S Learning Program