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Company Accounts - Issue of Debentures (Old & New) Notes


Distinguish between debentures and shares.

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Country Crafts Ltd. issued 1,00,000, 8% debentures of Rs.100 each at premium of 5% payable fully on application and redeemable at premium of Rs.10 Pass necessary journal entries at the time of issue.

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Q3. Koinal Chemicals Ltd. issued 20,00,000, 10% debentures of Rs.50 each at premium of 10%, payable as Rs.20 on application and balance on allotment. Debentures are redeemable at par after 6 years. All the money due on allotment was called up and received. Record necessary entries when premium money is included in allotment money

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Kapil Ltd. issued 50,000, 12% Debentures of Rs.100 each at a premium of 10% payable in full on application by 1st March, 2017. The issue was fully subscribed and debentures were allotted on 9th March, 2017. Pass necessary Journal Entries (including cash transactions).

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On 1st April 2017 Sheru Ltd. issued 1,00,000 12% debentures of Rs.100 each at a discount of 5%, redeemable on 31 March 2022. Issue was oversubscribed by 20,000 debentures, who were refunded their money. Interest is paid annually on 31 March. You are required to prepare:

i) Journal Entries at the time of issue of debentures.

ii) Discount on issue of Debenture Account

iii) Interest account and Debenture holder Account assuming TDS is deducted @ 10%.

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