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A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017?
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A company issued 12% debentures of the face value of Rs.10,00,000 at 1...
Journal Entries for the Accounting Year 2017
Issuance of Debentures
Date: 1-1-2017
Debit: Cash/Bank Account - Rs. 9,00,000 (Face Value - Discount)
Credit: Debenture Account - Rs. 10,00,000
Calculation:
Face Value: Rs. 10,00,000
Discount: Rs. (10,00,000 x 10%) = Rs. 1,00,000
Cash/Bank: Rs. (10,00,000 - 1,00,000) = Rs. 9,00,000
Recording the Interest Payment
Date: 30th June 2017
Debit: Interest Expense Account - Rs. 54,000 (6 months x Rs. 10,00,000 x 12%)
Debit: TDS Payable Account - Rs. 5,400 (10% TDS on Rs. 54,000)
Credit: Debenture Interest Payable Account - Rs. 59,400
Calculation:
Interest Expense: Rs. (10,00,000 x 12% x 6/12) = Rs. 54,000
TDS Payable: Rs. (54,000 x 10%) = Rs. 5,400
Debenture Interest Payable: Rs. (54,000 + 5,400) = Rs. 59,400
Recording the Redemption of Debentures
Date: 31st December 2017
Debit: Debenture Redemption Reserve Account - Rs. 50,000 (5% of Face Value)
Debit: Premium on Redemption of Debentures Account - Rs. 50,000 (5% of Face Value)
Debit: Debenture Interest Payable Account - Rs. 54,000
Credit: Debenture Account - Rs. 10,00,000
Credit: Bank Account - Rs. 9,44,000 (Face Value + Premium - Interest)
Calculation:
Debenture Redemption Reserve: Rs. (10,00,000 x 5%) = Rs. 50,000
Premium on Redemption of Debentures: Rs. (10,00,000 x 5%) = Rs. 50,000
Debenture Interest Payable: Rs. 54,000
Bank: Rs. (10,00,000 + 50,000 - 54,000) = Rs. 9,44,000
Explanation
- The company issued 12% debentures of Rs. 10,00,000 face value at 10% discount on 1-1-2017. The entry records the receipt of cash/bank and the issuance of debentures.
- The interest on debentures is payable on 30th June and 31st December every year. The entry records the interest expense, TDS payable, and debenture interest payable.
- The debentures are redeemable after five years at a 5% premium. The entry records the transfer of funds to the debenture redemption reserve and premium on redemption of debentures account. The debenture account is credited for the face value of debentures, and bank account is credited for the amount paid to debenture holders after
Issuance of Debentures
Date: 1-1-2017
Debit: Cash/Bank Account - Rs. 9,00,000 (Face Value - Discount)
Credit: Debenture Account - Rs. 10,00,000
Calculation:
Face Value: Rs. 10,00,000
Discount: Rs. (10,00,000 x 10%) = Rs. 1,00,000
Cash/Bank: Rs. (10,00,000 - 1,00,000) = Rs. 9,00,000
Recording the Interest Payment
Date: 30th June 2017
Debit: Interest Expense Account - Rs. 54,000 (6 months x Rs. 10,00,000 x 12%)
Debit: TDS Payable Account - Rs. 5,400 (10% TDS on Rs. 54,000)
Credit: Debenture Interest Payable Account - Rs. 59,400
Calculation:
Interest Expense: Rs. (10,00,000 x 12% x 6/12) = Rs. 54,000
TDS Payable: Rs. (54,000 x 10%) = Rs. 5,400
Debenture Interest Payable: Rs. (54,000 + 5,400) = Rs. 59,400
Recording the Redemption of Debentures
Date: 31st December 2017
Debit: Debenture Redemption Reserve Account - Rs. 50,000 (5% of Face Value)
Debit: Premium on Redemption of Debentures Account - Rs. 50,000 (5% of Face Value)
Debit: Debenture Interest Payable Account - Rs. 54,000
Credit: Debenture Account - Rs. 10,00,000
Credit: Bank Account - Rs. 9,44,000 (Face Value + Premium - Interest)
Calculation:
Debenture Redemption Reserve: Rs. (10,00,000 x 5%) = Rs. 50,000
Premium on Redemption of Debentures: Rs. (10,00,000 x 5%) = Rs. 50,000
Debenture Interest Payable: Rs. 54,000
Bank: Rs. (10,00,000 + 50,000 - 54,000) = Rs. 9,44,000
Explanation
- The company issued 12% debentures of Rs. 10,00,000 face value at 10% discount on 1-1-2017. The entry records the receipt of cash/bank and the issuance of debentures.
- The interest on debentures is payable on 30th June and 31st December every year. The entry records the interest expense, TDS payable, and debenture interest payable.
- The debentures are redeemable after five years at a 5% premium. The entry records the transfer of funds to the debenture redemption reserve and premium on redemption of debentures account. The debenture account is credited for the face value of debentures, and bank account is credited for the amount paid to debenture holders after
Community Answer
A company issued 12% debentures of the face value of Rs.10,00,000 at 1...
1/Jan./17,
Bank Dr. 9,00,000
disc./loss on issue of debe. a/c Dr. 1,50,000
To 12% Deb. a/c 10,00,000
To pre. on redemption of debenture a/c 50,000
30/6/17,
Deb. interest a/c Dr. 60,000
To Deb. holder a/c 54,000
To TDS a/c 6,000
Debenture holder a/c Dr. 54000
TDS a/c Dr. 6000
To Bank a/c 60000
31/12/17,
~ same BOTh entry~ for interest (30/6/16)
P/L a/c Dr. 1,20,000
To deb. interest a/c 1,20,000
P/L a/c Dr. 30,000
To Discount/ loss on issue of debe. a/c 30,000
Bank Dr. 9,00,000
disc./loss on issue of debe. a/c Dr. 1,50,000
To 12% Deb. a/c 10,00,000
To pre. on redemption of debenture a/c 50,000
30/6/17,
Deb. interest a/c Dr. 60,000
To Deb. holder a/c 54,000
To TDS a/c 6,000
Debenture holder a/c Dr. 54000
TDS a/c Dr. 6000
To Bank a/c 60000
31/12/17,
~ same BOTh entry~ for interest (30/6/16)
P/L a/c Dr. 1,20,000
To deb. interest a/c 1,20,000
P/L a/c Dr. 30,000
To Discount/ loss on issue of debe. a/c 30,000
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A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017?
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A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017?.
A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017?.
Solutions for A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? in English & in Hindi are available as part of our courses for CA Foundation.
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A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017?, a detailed solution for A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? has been provided alongside types of A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? theory, EduRev gives you an
ample number of questions to practice A company issued 12% debentures of the face value of Rs.10,00,000 at 10% discount on 1-1-2017. Debenture interest after deducting tax at source @ 10% was payable on 30th June and 31st of December every year. All the debentures were to be redeemed after the expiry of five year period at 5% premium.Pass journal entries for the accounting year 2017? tests, examples and also practice CA Foundation tests.
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