Question:
PQ Ltd. invited applications for issuing 6,000, 11% debentures of ₹ 100 each at a premium of ₹ 10 per debenture. The amount was payable as follows:
On Application – ₹ 30 per debenture
On Allotment – ₹ 80 per debenture (including premium)
The debentures were fully subscribed and all money was duly received. Pass necessary journal entries for the above transactions in the books of PQ Ltd.
PQ Ltd. invited applications for issuing 6,000, 11% debentures of ₹ 100 each at a premium of ₹ 10 per debenture. The amount was payable as follows:
On Application – ₹ 30 per debenture
On Allotment – ₹ 80 per debenture (including premium)
The debentures were fully subscribed and all money was duly received. Pass necessary journal entries for the above transactions in the books of PQ Ltd.
On Application – ₹ 30 per debenture
On Allotment – ₹ 80 per debenture (including premium)
The debentures were fully subscribed and all money was duly received. Pass necessary journal entries for the above transactions in the books of PQ Ltd.
Show Hint
Always split premium from face value in the entry for allotment.
Updated On: Jul 7, 2025
Hide Solution
Verified By Collegedunia
Solution and Explanation
Journal Entries:
Bank A/c Dr. ₹ 1,80,000
\hspace{1cm} To Debentures Application A/c ₹ 1,80,000
(Being application money received)
Debentures Application A/c Dr. ₹ 1,80,000
\hspace{1cm} To 11% Debentures A/c ₹ 1,80,000
(Being application transferred)
Bank A/c Dr. ₹ 4,80,000
\hspace{1cm} To Debentures Allotment A/c ₹ 4,80,000
(Being allotment money received)
Debentures Allotment A/c Dr. ₹ 4,80,000
\hspace{1cm} To 11% Debentures A/c ₹ 3,60,000
\hspace{1cm} To Securities Premium A/c ₹ 1,20,000
(Being allotment transferred)
Bank A/c Dr. ₹ 1,80,000
\hspace{1cm} To Debentures Application A/c ₹ 1,80,000
(Being application money received)
Debentures Application A/c Dr. ₹ 1,80,000
\hspace{1cm} To 11% Debentures A/c ₹ 1,80,000
(Being application transferred)
Bank A/c Dr. ₹ 4,80,000
\hspace{1cm} To Debentures Allotment A/c ₹ 4,80,000
(Being allotment money received)
Debentures Allotment A/c Dr. ₹ 4,80,000
\hspace{1cm} To 11% Debentures A/c ₹ 3,60,000
\hspace{1cm} To Securities Premium A/c ₹ 1,20,000
(Being allotment transferred)
Was this answer helpful?
0
0
Top Questions on Debentures
- Ridyum Limited issued 5,000, 9\% debentures of Rs 500 each at a premium of 10\%. The amount was payable as follows:
On Application - Rs 200 per debenture
On Allotment – Balance (including premium)
The debentures were fully subscribed and all amounts were duly received. Pass the necessary journal entries for issue of debentures in the books of Ridyum Limited. - Shivalik Ltd. issued 7% debentures of ₹ 100 each at a discount of 5% on 1st April, 2023. Discount on issue of debentures, ₹ 1,00,000 was completely written off through Statement of Profit and Loss on 31st March, 2024. On issue of debentures, \textquote{Debentures Account} was credited with __________________.
- Sunlock Ltd. purchased assets of book value \u20b9 50,00,000 and took over liabilities of \u20b9 6,00,000 from Moondock Ltd. It paid the purchase consideration by issue of \u20b9 46,00,000, 8% debentures of \u20b9 100 each at a discount of 10%. Record the journal entries in the books of Sunlock Ltd.
- Romerio Ltd. issued ₹ 80,00,000, 8% debentures of ₹ 100 each on 1st April, 2023 at par, redeemable at a premium of 5%. The company had ₹ 3,00,000 in its Securities Premium Account.
Give journal entries in the books of Romerio Ltd. relating to the: (i) Issue of Debentures
(ii) Debenture interest for the year ending 31st March, 2024 assuming that interest was paid yearly on 31st March.
(iii) Writing off Debenture Interest and Loss on Issue of Debentures. - EF Ltd. invited applications for issuing 4000, 10% debentures of \u20b9 100 each at a premium of \u20b9 10 per debenture. The amount was payable as follows :
On application \hspace{1.5cm} -- \u20b9 40 per debenture
On allotment \hspace{2cm} -- \u20b9 70 per debenture (including premium) The debentures were fully subscribed and all money was duly received. Pass necessary journal entries for the above transactions in the books of EF Ltd.
View More Questions
Questions Asked in CBSE CLASS XII exam
- A coil of 60 turns and area \( 1.5 \times 10^{-3} \, \text{m}^2 \) carrying a current of 2 A lies in a vertical plane. It experiences a torque of 0.12 Nm when placed in a uniform horizontal magnetic field. The torque acting on the coil changes to 0.05 Nm after the coil is rotated about its diameter by 90°. Find the magnitude of the magnetic field.
- CBSE CLASS XII - 2025
- Magnetism and matter
- Determine the values of $x$ for which the function $f(x) = \frac{x-4}{x+1}$ is an increasing or a decreasing function.
- CBSE CLASS XII - 2025
- Application of derivatives
Complete and balance the following chemical equations: (a) \[ 2MnO_4^-(aq) + 10I^-(aq) + 16H^+(aq) \rightarrow \] (b) \[ Cr_2O_7^{2-}(aq) + 6Fe^{2+}(aq) + 14H^+(aq) \rightarrow \]
- CBSE CLASS XII - 2025
- Redox Reactions
- Two wires of the same material and the same radius have their lengths in the ratio 2:3. They are connected in parallel to a battery which supplies a current of 15 A. Find the current through the wires.
- CBSE CLASS XII - 2025
- Current electricity
- Arun, Bashir and Joseph were partners in a firm sharing profits and losses in the ratio of 5 : 3 : 2. They admitted Daksh as a new partner who acquired his share entirely from Arun. If Arun sacrificed \( \frac{1}{5} \)th from his share to Daksh, Daksh's share in the profits of the firm will be :
- CBSE CLASS XII - 2025
- Partnership Accounts
View More Questions