Question:
Swar Sangam Limited issued 3,000, 9% debentures of ₹ 500 each at a premium of 10%. The amount was payable as follows:
On Application – ₹ 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 Swar Sangam Limited.
Swar Sangam Limited issued 3,000, 9% debentures of ₹ 500 each at a premium of 10%. The amount was payable as follows:
On Application – ₹ 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 Swar Sangam Limited.
On Application – ₹ 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 Swar Sangam Limited.
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Always separate premium amount from debenture face value in journal entries.
Updated On: Jul 14, 2025
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Solution and Explanation
Face value = ₹ 500 Premium = 10% of ₹ 500 = ₹ 50 Issue price = ₹ 550 Application money = ₹ 200 Allotment = ₹ 350 (including premium) Journal Entries: 1. Bank A/c Dr. ₹ 6,00,000 To Debentures Application A/c ₹ 6,00,000 (Being application money received) 2. Debentures Application A/c Dr. ₹ 6,00,000 To 9% Debentures A/c ₹ 6,00,000 (Being application money transferred) 3. Bank A/c Dr. ₹ 10,50,000 To Debentures Allotment A/c ₹ 10,50,000 (Being allotment money received) 4. Debentures Allotment A/c Dr. ₹ 10,50,000 To 9% Debentures A/c ₹ 9,00,000 To Securities Premium A/c ₹ 1,50,000 (Being allotment due on 3,000 debentures including premium) Final Answer: Debentures issued and premium recorded.
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