Question

Company issues 10,000, 12% debentures of ₹ 100 each at par, redeemable at premium of 5% after 5 years. At the time of allotment; journal Entry will be :

• A. Bank A/c Dr 10,50,000
  To Debenture application and Allotment A/c 10,00,00
  To Premium on Redemption an Debentures A/c 50,000
• B. Bank A/c Dr 10,12,000
  To debenture Application and allotment A/c 10,12,000
• C. Bank A/c Dr 10,70,000
  To Debenture Application and Allotment A/c 10,70,000
• D. Debenture Application and Allotment A/c Dr 10,00,000
  Loss of Issue of Debenture Dr 50,000
  To 12% Debenture A/c 10,00,000
  To premium on Redemption of Debentures A/c 50,000

Answer 1

The Correct Option is D

The correct option is (D) :Debenture Application and Allotment A/c Dr 10,00,000
Loss of Issue of Debenture Dr 50,000
To 12% Debenture A/c 10,00,000
To premium on Redemption of Debentures A/c 50,000.