To Debentures A/c [1* 100 ₹100F.V.] 10 . To Security Premium Reserve A/c [premium at issue] 15 . To Premium on Redemption of Debentures A/c [premium at redemption] (Being issue of debenture at Premium, redeemable at Premium) ENTRIES FOR REDEMPTION Debentures A/c [Face value ] 100 ₹100*1 Dr 10 Premium on Redemption of Debentures A/c [₹10*1] 110 To Debenture holders A/c [₹110*1] Debentureholders A/c [₹110(F.V. of debenture 110 +premium)*1] Dr 110 To Bank A/c [₹100*1] (Being amount of debenture along with premium paid to debenture holder) Example 1:- AB Ltd. issued 5,000, 7% Debentures of 100 each, at a premium of 5 ₹ ₹ each, redeemable at 10% premium. Pass necessary journal entries. Bank A/c [5,000* 5,25,000 ₹105 (₹100+₹5)] Dr . To Debenture Application A/c 5,25,000 (Being application money received) Debenture Application A/c [5,000*₹105] 5,25,000 Dr Loss on issue of Debentures 50,000 A/c [5,000*₹10] Dr 5,00,000 To Debentures A/c [5,000*₹100] 25,000 . To Security Premium Reserve A/c [5,000*₹5] 50,000 . To Premium on Redemption of Debentures A/c [5,000*₹10] (Being issue of debentures at Premium, redeemable at Premium) Example 2:- A Company issued 5,00,000, 9% Debentures of 100 each at 105 ₹ ₹ ₹ redeemable at a premium of 10% after five years. Pass necessary journal entries Bank A/c 5,25,000 Dr 5,25,000 To Debenture Application A/c (Being the application money received on 5,000 debentures @ 105 per debenture) ₹
To Debentures A/c [1* ₹100F.V.] . To Security Premium Reserve A/c [premium at issue] . To Premium on Redemption of Debentures A/c [premium at redemption] (Being issue of debenture at Premium, redeemable at Premium) 100 10 15 ENTRIES FOR REDEMPTION Debentures A/c [Face value ₹100*1 ] Dr Premium on Redemption of Debentures A/c [₹10*1] To Debenture holders A/c [₹110*1] 100 10 110 Debentureholders A/c [₹110(F.V. of debenture +premium)*1] Dr To Bank A/c [₹100*1] (Being amount of debenture along with premium paid to debenture holder) 110 110 Example 1:- AB Ltd. issued 5,000, 7% Debentures of ₹ 100 each, at a premium of ₹ 5 each, redeemable at 10% premium. Pass necessary journal entries. Bank A/c [5,000* ₹105 (₹100+₹5)] Dr . To Debenture Application A/c (Being application money received) 5,25,000 5,25,000 Debenture Application A/c [5,000*₹105] Dr Loss on issue of Debentures A/c [5,000*₹10] Dr To Debentures A/c [5,000*₹100] . To Security Premium Reserve A/c [5,000*₹5] . To Premium on Redemption of Debentures A/c [5,000*₹10] (Being issue of debentures at Premium, redeemable at Premium) 5,25,000 50,000 5,00,000 25,000 50,000 Example 2:- A Company issued ₹ 5,00,000, 9% Debentures of ₹ 100 each at ₹ 105 redeemable at a premium of 10% after five years. Pass necessary journal entries Bank A/c Dr To Debenture Application A/c (Being the application money received on 5,000 debentures @ ₹ 105 per debenture) 5,25,000 5,25,000
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