Bank a/c. Dr. 576000 to deb application 576000Deb application a/c. Dr. 576000loss on issue a/c Dr.54000 To premium on redemption 30000To Debentures 600000Deb allotment 900000 To debenture 900000 Bank 900000 To debenture allotment 900000

**Journal Entry for Issue of Debentures**

**1. Introduction**
When a company issues debentures, it means that it is borrowing money from the public or investors. Debentures are long-term debt instruments that are issued by companies to raise funds for their business operations. In this scenario, Y Ltd has issued 3000 debentures with a face value of Rs500 each.

**2. Terms of the Debentures**
Before journalizing the entry, it is important to understand the terms of the debentures issued by Y Ltd. In this case, the debentures are:
- Face Value: Rs500 each
- Interest Rate: 9%
- Discount: 4%
- Redemption: After 4 years
- Redemption Premium: 5%
- Payment Schedule: Rs200 on application and the balance on allotment

**3. Journal Entry**
The journal entry for the issue of debentures by Y Ltd can be divided into two parts: application and allotment.

**a. Application**
In the application stage, the company receives applications from investors who wish to subscribe to the debentures. The journal entry for the application stage is as follows:

Debenture Application A/c (3000 x Rs500) Dr.
To Debenture A/c (Face Value) Cr.
To Discount on Issue of Debentures A/c (3000 x Rs500 x 4%) Cr.
To Bank A/c (Application Money Received) Cr.

Explanation:
- Debenture Application A/c is debited with the total value of debentures applied for (3000 debentures x Rs500 face value).
- Debenture A/c is credited with the face value of the debentures issued (3000 debentures x Rs500 face value).
- Discount on Issue of Debentures A/c is credited with the discount amount (3000 debentures x Rs500 face value x 4% discount).
- Bank A/c is credited with the application money received (Rs200 x 3000 debentures).

**b. Allotment**
After receiving the applications, the company allots the debentures to the applicants. The journal entry for the allotment stage is as follows:

Debenture A/c (Face Value) Dr.
To Discount on Issue of Debentures A/c (3000 x Rs500 x 4% discount) Dr.
To Premium on Redemption of Debentures A/c (3000 x Rs500 x 5% premium) Cr.
To Debenture Allotment A/c (3000 x Rs500 - Application Money) Cr.

Explanation:
- Debenture A/c is debited with the face value of the debentures issued (3000 debentures x Rs500 face value).
- Discount on Issue of Debentures A/c is debited with the discount amount (3000 debentures x Rs500 face value x 4% discount).
- Premium on Redemption of Debentures A/c is credited with the premium amount (3000 debentures x Rs500 face value x 5% premium).
- Debenture Allotment A/c is credited with the difference between the face value and application money (3000 debentures x Rs500 face value - Rs200 x 3000 debentures).

**4. Conclusion**
By journalizing these entries