Journalise the following

(i) A Debenture issued at Rs.95, repayable at Rs.100.

(ii) A Debenture issued at Rs.95, repayable at Rs.105.

(iii) A Debenture issued at Rs.100, repayable at Rs.105.

The face value of debenture in each of the above cases is Rs.100.

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Solution

$Journal Entries$
$\begin{matrix} Date & Particulars & LF & Amt. (Dr) & Amt.(Cr) (i) & Bank A/c & Dr & 95 Discount on Issue of Debenture A/c & Dr & 5 To Debentures A/c & 100 (Debenture of Rs.100 issued at Rs.5 discount with the term repayable at Rs.100) - --------------------------------------------- - (ii) & Bank A/c & Dr & 95 Loss on Issue of Debenture A/c & Dr & 10 To Debentures A/c & 100 To Premium on Redemption of & 5 Debenture A/c (Debenture of Rs.100 issued at a discount of Rs.5 and with the term repayable at Rs.105) - --------------------------------------------- - (iii) & Bank A/c & Dr & 100 Loss on issue of Debenture A/c & Dr & 5 To Debentures A/c & 100 To Premium on Redemption of & 5 Debenture A/c (Debenture of Rs.100 issued with the term repayable at Rs.105) \end{matrix}$

Note : Whenever the information in question gives condition of redemption, assure that the effect of profit or loss on redemption (discount on redemption or premium on redemption) is to taken at the time of issue.

(i) Debentures are repayable at par, hence no profit no loss.

(ii) Debentures are repayable at Rs. 105 (face valuer 100) hence, it will give a loss of 5 and at the time of issue it is already discount of Rs. 5 which is again a loss so loss will be debit with Rs. 10 (5+5) on issue.

(iii) The transaction is same as case (ii) except for issue at par Rs. 100 hence, loss will be only Rs. 5 (premium on redemption).

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Similar questions

Journalise the following:

(i) A debenture issued at Rs 95, repayable at Rs 100;

(ii) A debenture issued at Rs 95, repayable at Rs 105; and

(iii) A debenture issued at Rs 100, repayable at Rs 105;

The face value of debenture in each of the above cases is Rs 100.

Q. Journalise the following:
(a) A debenture issued at ₹95, repayable at ₹ 100.
(b) A debenture issued at ₹95, repayable at ₹ 105.
(c) A debenture issued at ₹95, repayable at ₹ 105.
The face value of debenture is ₹ 100 in each of the above cases.

Pass necessary Journal entries for the issue and redemption of Debentures in the followings cases :

(i) 15,000; $10 %$ Debentures of Rs 100 each issued at $10 %$ premium, repayable at par.

(ii) 6,00,000; $12 %$ Debenture of Rs 500 each issued at $5 %$ premium , repayable at $10 %$ pemium.

Q. ABC Ltd issued 1,000 debentures of Rs.100 each for Rs.85 and are repayable for Rs.110 each. At the time of receipt, the bank account is credited with.

A company issues the following debentures:

(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;

(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;

(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;

(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and

(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.

Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

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Journalise the following (i) A Debenture issued at Rs.95, repayable at Rs.100. (ii) A Debenture issued at Rs.95, repayable at Rs.105. (iii) A Debenture issued at Rs.100, repayable at Rs.105. The face value of debenture in each of the above cases is Rs.100.

Journalise the following

(i) A Debenture issued at Rs.95, repayable at Rs.100.

(ii) A Debenture issued at Rs.95, repayable at Rs.105.

(iii) A Debenture issued at Rs.100, repayable at Rs.105.

The face value of debenture in each of the above cases is Rs.100.