1000 is offered at 1 050 it is a case of issue of debentures at premium. For example if a debenture of rs. 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. Let us learn more about the various methods of redemption of debentures and their accounting treatments.
This process of discharging the company s debt is known as the redemption of debentures. Hence when their period expires debenture holders are paid back their principal amount. Debentures are debt instruments.
Redemption out of provision. Show the journal entries. It was resolved to utilise the profits to repay its debentures of rs 70 000 now redeemable at a premium of 5.
A limited company has a balance of rs 1 00 000 at the credit of profit and loss account. The following journal entries will be passed. However method 1 is more logical and rational from the accounting.
At the time of repayment of the loan by the company it needs to reverse the entry in order to cancel it. While we will show the debentures suspense a c on the assets side of the balance sheet under other non current assets. In this case we will show the debentures account on the liabilities side of the balance sheet.
100 at a premium of 10 it means the company is receiving rs.
Issue of debentures journal entries. Pass the necessary journal entries for the issue of these debentures. Issue of debentures different terms of issue record journal entries in following cases. 1 00 000 12 debentures at par redeemable at par. 1 00 000 12 debentures at a discount of 10 redeemable at par.
Conditions of redemption will be coupled with the conditions of issue. Such terms and their journal entries are given below. A company issued rs 5 00 000 12 debentures at 94. The terms of the issue include the repayment of the debentures in five equal instalments beginning with the end of the first year of issue.
When the payment received and the nominal value of the debentures are same then it is the case of issue of debentures at par. In other terms it is when the issue price is equivalent to the face value. For example issue of debentures of rs 1 000 for rs 1 000. There are different journal entries in connection with the issue of debentures.
Debentures are the most common form of long term loans that can be taken out by a corporation. This is also an important financial instrument to raise funds from the public in exchange of a fixed rate of interest. A company can issue debentures at a discount which is called debentures issued at discount. 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. Issue of debenture at a premium. Like issue of shares debentures are issued at a premium which seldom happens.
In other words they are issued at a higher price than the nominal or face value e g if a company issues 8 1 000 debentures of rs.
In other words they are issued at a higher price than the nominal or face value e g if a company issues 8 1 000 debentures of rs. Like issue of shares debentures are issued at a premium which seldom happens. Issue of debenture at a premium.
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.
A company can issue debentures at a discount which is called debentures issued at discount. This is also an important financial instrument to raise funds from the public in exchange of a fixed rate of interest. Debentures are the most common form of long term loans that can be taken out by a corporation.
There are different journal entries in connection with the issue of debentures. For example issue of debentures of rs 1 000 for rs 1 000. In other terms it is when the issue price is equivalent to the face value.
When the payment received and the nominal value of the debentures are same then it is the case of issue of debentures at par. The terms of the issue include the repayment of the debentures in five equal instalments beginning with the end of the first year of issue. A company issued rs 5 00 000 12 debentures at 94.
Such terms and their journal entries are given below. Conditions of redemption will be coupled with the conditions of issue. 1 00 000 12 debentures at a discount of 10 redeemable at par.
1 00 000 12 debentures at par redeemable at par. Issue of debentures different terms of issue record journal entries in following cases. Pass the necessary journal entries for the issue of these debentures.
