CBSE 2025, Compartment, Set 1

Question

Pass necessary journal entries for the issue of 11% Debentures in the books of Arpita Ltd. in the following cases:
(i) Issued 2,000, 11% Debentures of ₹100 each at a premium of 10%, redeemable at a premium of 5%.
(ii) Issued 5,000, 11% Debentures of ₹100 each at a discount of 10%, redeemable at a premium of 5%.

Edvaya · Accepted Answer

The correct answer is Subjective. **Journal Entries in the books of Arpita Ltd.** **(i) Issued at premium, redeemable at premium:** | Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) | |---|---|---|---|---| | | Bank A/c Dr. ($2,000 	imes 110$) To Debenture Application and Allotment A/c *(Debenture application money received)* | | 2,20,000 | 2,20,000 | | | Debenture Application and Allotment A/c Dr. Loss on Issue of Debentures A/c Dr. ($2,000 	imes 5$) To 11% Debentures A/c ($2,000 	imes 100$) To Securities Premium A/c ($2,000 	imes 10$) To Premium on Redemption of Debentures A/c *(Debentures issued at premium, redeemable at premium)* | | 2,20,000 10,000 | 2,00,000 20,000 10,000 | **(ii) Issued at discount, redeemable at premium:** | Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) | |---|---|---|---|---| | | Bank A/c Dr. ($5,000 	imes 90$) To Debenture Application and Allotment A/c *(Debenture application money received)* | | 4,50,000 | 4,50,000 | | | Debenture Application and Allotment A/c Dr. Loss on Issue of Debentures A/c Dr.* To 11% Debentures A/c ($5,000 	imes 100$) To Premium on Redemption of Debentures A/c *(Debentures issued at discount, redeemable at premium)* | | 4,50,000 75,000 | 5,00,000 25,000 | *\*Note: Loss on Issue (75,000) represents Discount on issue (50,000) + Premium on redemption (25,000). These can also be debited separately.*

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Accountancy > Accounting For Companies > Issue Of Debentures

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