If debentures are issued at a price more than its nominal value face value such an issue is called issue at a premium. Iii issue of debentures at premium. Ledger accounts and balance sheet extract only.
The issue was fully subscribed and all money was received in full. All the debenture were fully subscribed and the debenture money. Ltd issued 5000 10 debenture of rs 100 each payable as rs 40 each on an application rs 30 each on an allotment and rs 30 each on first and final call.
The entries regarding the issue of debentures are similar to the entries for the issue of shares. A credit debentures 1 50 000 and debit bank a c 1 50 000 b debit debenture suspense a c 1 00 000 and credit bank a c 1 00 000. When debentures of 1 00 000 are issued as collateral security against a loan of 1 50 000 the entry for issue of debentures will be.
Total cost of issue of debentures to be written off rs 15 000 rs 3 000 rs 18 000 a as debentures will be redeemed after 10 years one tenth of the total cost of issue of debentures should be written off for every. Expenses on issue of debentures rs 3 000. Discount allowed on issue of debentures 3 100 x rs 5 00 000 rs 15 000.
Journal entry for allotment money due will be. The debentures are redeemable after 10 years. 200 each at a discount of 5 on 1st april 2017 payable as rs 60 on application and balance on allotment.
Issued 60000 6 debentures of rs. Issue of debentures at discount entry for allotment money due. This issue of debentures that happens can be of three kinds just like an issue of shares at par at a discount and at a premium so let us take a look at all three and their respective accounting entries as well.
Debentures in the general course of business are issued for cash.
Issue of debentures entry. That is the amount to be debited to profit and loss account on the basis of calculation based on outstanding debentures. A company issued rs 1 00 000 10 debentures at 96. The terms of issue provide the repayment of the debentures at the end of 5th year. To discount on issue of debentures a c 12 000 being discount on issue of debentures written off illustration 7.
Discount written off equally a company issued 5 000 15 debentures of rs. 100 each at rs 95 on 1 january 2006. As per the terms of issue the debentures are to be redeemed at the end of five years. In other terms it is when the issue price is greater than the face value of the debentures.
For example issue of debenture of rs 1 000 for rs 1 200 rs 200 being the amount of premium there are different journal entries in connection with the issue of debentures. On the receipt of application money. Entry 91 of the union list provides the central government with the power to prescribe the rate of stamp duty on issue and transfer of debentures transfer of shares and bill of exchange. Further as per entry 63 of the state list the state government has power to prescribe rate of stamp duty in respect of documents other than those specified.
Issue of debentures for cash.
Issue of debentures for cash. Further as per entry 63 of the state list the state government has power to prescribe rate of stamp duty in respect of documents other than those specified. Entry 91 of the union list provides the central government with the power to prescribe the rate of stamp duty on issue and transfer of debentures transfer of shares and bill of exchange.
On the receipt of application money. For example issue of debenture of rs 1 000 for rs 1 200 rs 200 being the amount of premium there are different journal entries in connection with the issue of debentures. In other terms it is when the issue price is greater than the face value of the debentures.
As per the terms of issue the debentures are to be redeemed at the end of five years. 100 each at rs 95 on 1 january 2006. Discount written off equally a company issued 5 000 15 debentures of rs.
To discount on issue of debentures a c 12 000 being discount on issue of debentures written off illustration 7. The terms of issue provide the repayment of the debentures at the end of 5th year. A company issued rs 1 00 000 10 debentures at 96.
That is the amount to be debited to profit and loss account on the basis of calculation based on outstanding debentures.
