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On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.?
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On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100...
Journal Entries in the book of AVI
1. Purchase of Debentures
Date: 1st May 2020
Debenture A/c Dr. - Rs 5,200 (50 debentures x Rs 100 each x Rs 104)
To Cash A/c - Rs 5,200
2. Interest Accrued
Date: 31st March 2021
Debenture Interest A/c Dr. - Rs 364 (50 debentures x Rs 100 each x 7%)
To Debentures A/c - Rs 364
3. Interest Payable
Date: 31st March 2021
Debenture Interest A/c Dr. - Rs 364
To Debenture Interest Payable A/c - Rs 364
4. Payment of Interest
Date: 30th September 2021
Debenture Interest Payable A/c Dr. - Rs 364
To Bank A/c - Rs 364
Explanations:
1. Purchase of Debentures: On May 1, 2020, AVI purchased 50 debentures from Monika at a price of Rs 104 each. The total purchase cost is calculated as follows: 50 debentures x Rs 100 each x Rs 104 = Rs 5,20,000. The entry records the purchase of debentures by debiting the Debenture A/c and crediting the Cash A/c.
2. Interest Accrued: At the end of the financial year, AVI needs to record the interest accrued on the debentures. The calculation is done by multiplying the number of debentures (50) by the face value (Rs 100) and the interest rate (7%). The entry debits the Debenture Interest A/c and credits the Debentures A/c.
3. Interest Payable: AVI needs to record the interest payable on the debentures. The entry debits the Debenture Interest A/c and credits the Debenture Interest Payable A/c.
4. Payment of Interest: On September 30, 2021, AVI pays the interest due on the debentures. The entry debits the Debenture Interest Payable A/c and credits the Bank A/c.
These journal entries help AVI accurately record the purchase, accrual, and payment of interest on the debentures in its books of accounts.
1. Purchase of Debentures
Date: 1st May 2020
Debenture A/c Dr. - Rs 5,200 (50 debentures x Rs 100 each x Rs 104)
To Cash A/c - Rs 5,200
2. Interest Accrued
Date: 31st March 2021
Debenture Interest A/c Dr. - Rs 364 (50 debentures x Rs 100 each x 7%)
To Debentures A/c - Rs 364
3. Interest Payable
Date: 31st March 2021
Debenture Interest A/c Dr. - Rs 364
To Debenture Interest Payable A/c - Rs 364
4. Payment of Interest
Date: 30th September 2021
Debenture Interest Payable A/c Dr. - Rs 364
To Bank A/c - Rs 364
Explanations:
1. Purchase of Debentures: On May 1, 2020, AVI purchased 50 debentures from Monika at a price of Rs 104 each. The total purchase cost is calculated as follows: 50 debentures x Rs 100 each x Rs 104 = Rs 5,20,000. The entry records the purchase of debentures by debiting the Debenture A/c and crediting the Cash A/c.
2. Interest Accrued: At the end of the financial year, AVI needs to record the interest accrued on the debentures. The calculation is done by multiplying the number of debentures (50) by the face value (Rs 100) and the interest rate (7%). The entry debits the Debenture Interest A/c and credits the Debentures A/c.
3. Interest Payable: AVI needs to record the interest payable on the debentures. The entry debits the Debenture Interest A/c and credits the Debenture Interest Payable A/c.
4. Payment of Interest: On September 30, 2021, AVI pays the interest due on the debentures. The entry debits the Debenture Interest Payable A/c and credits the Bank A/c.
These journal entries help AVI accurately record the purchase, accrual, and payment of interest on the debentures in its books of accounts.
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On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.?
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On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.? 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 On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.?.
On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.? 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 On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.? covers all topics & solutions for B Com 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st may, 2020 AVI purchased from Monika 50, 7% debentures of rs 100 each @ rs 104 cum- interest. Interest is payable on these debentures on 30th September and 31st March each year, pass necessary journal entries in the book of AVI.?.
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