Question:
Sargam Limited issued 2,000, 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 Sargam Limited.
Sargam Limited issued 2,000, 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 Sargam Limited.
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 Sargam Limited.
Show Hint
When debentures are issued at a premium, the premium amount is credited to the 'Securities Premium' account, usually at the allotment stage unless specified otherwise. Ensure the Debenture account is credited only with the face value portion of the instalments.
Updated On: Jan 13, 2026
Hide Solution
Verified By Collegedunia
Solution and Explanation
Calculations:
- Number of Debentures: 2,000
- Face Value per Debenture: ₹500
- Premium: 10% of ₹500 = ₹50
- Application Money per Debenture: ₹200
- Allotment Money per Debenture (including premium): Face Value + Premium - Application Money = ₹500 + ₹50 - ₹200 = ₹350
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 1. Application Money Received | ||||
| Bank A/c | 4,00,000 | |||
| To 9% Debenture Application A/c | 4,00,000 | |||
| (Application money received on 2,000 debentures @ ₹200 per debenture) | ||||
| 2. Transfer of Application Money | ||||
| 9% Debenture Application A/c | 4,00,000 | |||
| To 9% Debentures A/c | 4,00,000 | |||
| (Transfer of application money to debentures account) | ||||
| 3. Allotment Money Due | ||||
| 9% Debenture Allotment A/c | 7,00,000 | |||
| To 9% Debentures A/c | 6,00,000 | |||
| To Securities Premium Reserve A/c | 1,00,000 | |||
| (Allotment money due on 2,000 debentures @ ₹350 per debenture including premium) | ||||
| 4. Allotment Money Received | ||||
| Bank A/c | 7,00,000 | |||
| To 9% Debenture Allotment A/c | 7,00,000 | |||
| (Allotment money received on 2,000 debentures) | ||||
Explanation:
- Entries 1 & 2: Record the receipt of application money and the transfer of that money to the debenture account.
- Entry 3: This entry is for making the allotment money due on the debentures. The debenture account is credited with the face value of the debentures being allotted (2,000 × ₹300 = ₹6,00,000). The Securities Premium Reserve is credited with the premium amount (2,000 × ₹50 = ₹1,00,000).
- Entry 4: Records the receipt of the allotment money in the bank account.
Total receipt will be application (2,000 × 200) + allotment (2,000 × 350) = 4,00,000 + 7,00,000 = 11,00,000
Was this answer helpful?
0
0
Top Questions on Debentures
- Ajanta Ltd. purchased machinery worth Rs 36,00,000 from Sujata Ltd. Ajanta Ltd. paid half the amount to Sujata Ltd. through a bank draft and the balance by issuing 8 debentures of Rs 100 each at a discount of 10.
Pass the necessary journal entries in the books of Ajanta Ltd. for the above transactions. - If a company issues Rs. 1,00,000, 9% debentures of Rs. 100 each at a discount of 5% but redeemable at a premium of 5%, then what amount will be debited to Loss on Issue of Debentures Account?
- CUET (UG) - 2025
- Accountancy
- Debentures
- G.S. Rai company ltd. purchased assets of the book value of Rs. 98,000 from another firm. It was agreed that purchase consideration be paid by issuing 11% debentures of Rs. 100 each. Assume debentures have been issued at discount of 20%. Identify the number of debentures issued by the company to the vendor:
- CUET (UG) - 2025
- Accountancy
- Debentures
- Debenture Application & Allotment A/c ........ Dr. 95,000
Loss on Issue of Debentures A/c ................. Dr. 10,000
\hspace{0.5cm} To 9% Debenture A/c ...................................... 1,00,000
\hspace{0.5cm} To Premium on Redemption of Debentures A/c .... 5,000
On the basis of the above entry, determine the rate of discount at which Rs. 1,00,000, 9% debentures of Rs. 100 each were issued if they were to be redeemed at a premium of 5%.- CUET (UG) - 2025
- Accountancy
- Debentures
- VX Ltd. issued 30,000, 8% debentures of ₹ 100 each at a discount of 10% redeemable at a certain rate of premium. On issue of these debentures, ‘Loss on issue of debentures account’ was debited with ₹ 4,50,000. The amount of premium on redemption of debentures was___.
View More Questions
Questions Asked in CBSE CLASS XII exam
If vector \( \mathbf{a} = 3 \hat{i} + 2 \hat{j} - \hat{k} \) \text{ and } \( \mathbf{b} = \hat{i} - \hat{j} + \hat{k} \), then which of the following is correct?
- Find the value of $x$, if \[ \begin{bmatrix} 1 & 3 & 2 \\ 2 & 5 & 1 \\ 15 & 3 & 2 \end{bmatrix} \begin{bmatrix} 1 \\ x \\ 2 \end{bmatrix} = \begin{bmatrix} 0 \\ 0 \\ 0 \end{bmatrix} \]
- Two point charges of \( -5\,\mu C \) and \( 2\,\mu C \) are located in free space at \( (-4\,\text{cm}, 0) \) and \( (6\,\text{cm}, 0) \) respectively.
(a) Calculate the amount of work done to separate the two charges at infinite distance.
(b) If this system of charges was initially kept in an electric field \[ \vec{E} = \frac{A}{r^2}, \text{ where } A = 8 \times 10^4\, \text{N}\,\text{C}^{-1}\,\text{m}^2, \] calculate the electrostatic potential energy of the system.- CBSE CLASS XII - 2025
- Electrostatics
- 4,000 shares of ₹ 10 each were forfeited for non-payment of second and final call money of ₹ 2 per share. The minimum amount that the company must collect at the time of reissue of these shares will be :
- CBSE CLASS XII - 2025
- Accounting for Share Capital
- If $y = a \cos(\log x) + b \sin(\log x)$, then $x^2y'' + xy'1$ is:
- CBSE CLASS XII - 2025
- Continuity and differentiability
View More Questions