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On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%?
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On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqc...
Journal Entry at the Time of Issue of Debentures:
Debenture A/c Dr. 9,500,000
Discount on Issue of Debentures A/c Dr. 500,000
To Bank A/c (Issued 100,000 debentures @ Rs. 95 each) 9,500,000
Discount on Issue of Debentures Account:
It is a nominal account and is credited with the amount of discount allowed on the issue of debentures. In this case, the discount allowed is Rs. 500,000.
Discount on Issue of Debentures A/c Dr. 500,000
To Profit and Loss A/c 500,000
Interest Account and Debenture Holder Account assuming TDS is deducted @10%:
On 31st March, the company will pay interest to debenture holders. The entry for the same will be:
Interest A/c Dr. 1,200,000
To Debenture Holder A/c (100,000 debentures @ 12% p.a. for 1 year) 1,200,000
TDS @10% will be deducted on the interest paid to debenture holders, and the net amount will be credited to their account. The entry for the same will be:
Debenture Holder A/c Dr. 1,080,000
To TDS A/c (10% of Rs. 1,200,000) 120,000
To Bank A/c (Amount credited to debenture holders) 1,080,000
Explanation:
- The company issued 100,000 debentures at a discount of 5%, which means each debenture was issued at Rs. 95.
- The total amount raised by the company through the issue of debentures was Rs. 9,500,000 (100,000 debentures x Rs. 95 each).
- The issue was oversubscribed by 20,000 debentures, and the excess money was refunded to the applicants.
- The company will pay interest to debenture holders annually on 31st March. The rate of interest is 12% p.a.
- TDS @10% will be deducted on the interest paid to debenture holders, and the net amount will be credited to their account.
Debenture A/c Dr. 9,500,000
Discount on Issue of Debentures A/c Dr. 500,000
To Bank A/c (Issued 100,000 debentures @ Rs. 95 each) 9,500,000
Discount on Issue of Debentures Account:
It is a nominal account and is credited with the amount of discount allowed on the issue of debentures. In this case, the discount allowed is Rs. 500,000.
Discount on Issue of Debentures A/c Dr. 500,000
To Profit and Loss A/c 500,000
Interest Account and Debenture Holder Account assuming TDS is deducted @10%:
On 31st March, the company will pay interest to debenture holders. The entry for the same will be:
Interest A/c Dr. 1,200,000
To Debenture Holder A/c (100,000 debentures @ 12% p.a. for 1 year) 1,200,000
TDS @10% will be deducted on the interest paid to debenture holders, and the net amount will be credited to their account. The entry for the same will be:
Debenture Holder A/c Dr. 1,080,000
To TDS A/c (10% of Rs. 1,200,000) 120,000
To Bank A/c (Amount credited to debenture holders) 1,080,000
Explanation:
- The company issued 100,000 debentures at a discount of 5%, which means each debenture was issued at Rs. 95.
- The total amount raised by the company through the issue of debentures was Rs. 9,500,000 (100,000 debentures x Rs. 95 each).
- The issue was oversubscribed by 20,000 debentures, and the excess money was refunded to the applicants.
- The company will pay interest to debenture holders annually on 31st March. The rate of interest is 12% p.a.
- TDS @10% will be deducted on the interest paid to debenture holders, and the net amount will be credited to their account.
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On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%?
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On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%? 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 On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%?.
On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%? 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 On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On 1st april 2017 sheru ltd. issued 100000 12% debentures of rs100 eqch at a discount of 5%, redeemable on 31st March 2022. Issue was oversubscribed by 20000 debentures, who were refund their money. Interst is paid annually on 31st March. You are required to prepare:(i)journal entry at the time of issue of debentures. (ii) discount on issue of debentures account. (iii) interest account and Debentures holder account assuming TDS is deducted @10%?.
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