On 1st April, 2025 Weavers Ltd. issued - 5,00,000 12% debentures of 100 each at a discount of 5%, redeemable on 31st March, 2030. Issue was…
CA Foundation · Accounting · RTP · September 2025
On 1st April, 2025 Weavers Ltd. issued - 5,00,000 12% debentures of 100 each at a discount of 5%, redeemable on 31st March, 2030. Issue was oversubscribed by - 1,00,000 debentures, who were refunded their money. Interest is paid annually on 31st 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%
Suggested Answer and Working Notes:
Journal in the Books of Weavers Ltd. Date Particulars LF Dr. (00) Cr. (00) 2025 Apr, 1 Bank A/c Dr. 5,70,000 To Debenture Application A/c (Being debenture application money received for6,00,000 debentures) 5,70,000 Debenture Application A/c Dr. 5,70,000 Discount on Issue of Debenture A/c Dr. 25,000 To 12% Debenture A/c 5,00,000 To Bank A/c (Being application money transferred to debenture account and excess refunded) 95,000
Topics: Issue of Debentures
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