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X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount?
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X LTD issued 1000,9% debentures of RS.100 each. write journal entries ...
Issuance of 9% Debentures by X LTD
At Par
Journal Entries:
Debenture Account Dr. 1,00,000
To Bank Account 1,00,000
Explanation: When the debentures are issued at par, the face value of the debentures is equal to the issue price. Therefore, the company will receive the full amount of the debentures from the subscribers, and the journal entry will be passed to record the receipt of the amount.
At 20% Premium
Journal Entries:
Debenture Account Dr. 1,20,000
To Bank Account 1,00,000
To Securities Premium Account 20,000
Explanation: When the debentures are issued at a premium, the issue price of the debentures is higher than the face value. Therefore, the company will receive an amount higher than the face value of the debentures from the subscribers. The excess amount received is called securities premium, and it is credited to the Securities Premium Account. The journal entry will be passed to record the receipt of the amount.
At 10% Discount
Journal Entries:
Bank Account Dr. 90,000
Discount on Issue of Debentures Account Dr. 10,000
To Debenture Account 1,00,000
Explanation: When the debentures are issued at a discount, the issue price of the debentures is lower than the face value. Therefore, the company will receive an amount lower than the face value of the debentures from the subscribers. The discount allowed is debited to the Discount on Issue of Debentures Account. The journal entry will be passed to record the receipt of the amount.
At Par
Journal Entries:
Debenture Account Dr. 1,00,000
To Bank Account 1,00,000
Explanation: When the debentures are issued at par, the face value of the debentures is equal to the issue price. Therefore, the company will receive the full amount of the debentures from the subscribers, and the journal entry will be passed to record the receipt of the amount.
At 20% Premium
Journal Entries:
Debenture Account Dr. 1,20,000
To Bank Account 1,00,000
To Securities Premium Account 20,000
Explanation: When the debentures are issued at a premium, the issue price of the debentures is higher than the face value. Therefore, the company will receive an amount higher than the face value of the debentures from the subscribers. The excess amount received is called securities premium, and it is credited to the Securities Premium Account. The journal entry will be passed to record the receipt of the amount.
At 10% Discount
Journal Entries:
Bank Account Dr. 90,000
Discount on Issue of Debentures Account Dr. 10,000
To Debenture Account 1,00,000
Explanation: When the debentures are issued at a discount, the issue price of the debentures is lower than the face value. Therefore, the company will receive an amount lower than the face value of the debentures from the subscribers. The discount allowed is debited to the Discount on Issue of Debentures Account. The journal entry will be passed to record the receipt of the amount.
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X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount?
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X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount?.
X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount? for B Com 2024 is part of B Com preparation. The Question and answers have been prepared according to the B Com exam syllabus. Information about X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X LTD issued 1000,9% debentures of RS.100 each. write journal entries when they are issued. at par, at 20% premium, at 10 discount?.
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