On 1 st April, 2023 Universe Ltd. issued 12% debentures of the face value of 40,00,000 at 10% discount. Debenture interest after deducting tax at…

In the Books of Universe Limited Journal Entries Date Particulars Dr. (₹) Cr. (₹) 1-4-2023 Bank A/c Dr. 36,00,000 Discount/Loss on Issue of Debentures A/c Dr. 6,00,000 To 12% Debentures A/c 40,00,000 To Premium on Redemption of Debentures A/c 2,00,000 (For issue of debentures at discount redeemable at premium) 30-9-2023 Debenture Interest A/c Dr. 2,40,000 To Debenture holders A/c 2,16,000 To Tax Deducted at Source A/c 24,000 (For interest payable) 30-9-2023 Debenture holders A/c Dr. 2,16,000 Tax Deducted at Source A/c Dr. 24,000 To Bank A/c 2,40,000 (For payment of interest and TDS) 31-3-2024 Debenture Interest A/c Dr. 2,40,000 To Debenture holders A/c 2,16,000 To Tax Deducted at Source A/c 24,000 (For interest payable) 31-3-2024 Debenture holders A/c Dr. 2,16,000 Tax Deducted at Source A/c Dr. 24,000 To Bank A/c 2,40,000 (For payment of interest and tax) 31-3-2024 Profit and Loss A/c Dr. 4,80,000 To Debenture Interest A/c 4,80,000 (For transfer of debenture interest to profit and loss account at the end of the year) 31-3-2024 Profit and Loss A/c Dr. 1,20,000 To Discount/Loss on issue of debenture A/c 1,20,000 (For proportionate debenture discount and premium on redemption written off, i.e., 6,00,000 x 1/5)