Question:
Sargam Limited issued 2,000, 9 debentures of Rs 500 each at a premium of 10. The amount was payable as follows:
On Application - Rs 200 per debenture
On Allotment - Balance (including premium)
The debentures were fully subscribed and all amounts were duly received.
Pass the necessary journal entries for issue of debentures in the books of Sargam Limited.
Sargam Limited issued 2,000, 9 debentures of Rs 500 each at a premium of 10. The amount was payable as follows:
On Application - Rs 200 per debenture
On Allotment - Balance (including premium)
The debentures were fully subscribed and all amounts were duly received.
Pass the necessary journal entries for issue of debentures in the books of Sargam Limited.
On Application - Rs 200 per debenture
On Allotment - Balance (including premium)
The debentures were fully subscribed and all amounts were duly received.
Pass the necessary journal entries for issue of debentures in the books of Sargam Limited.
Show Hint
When debentures are issued at a premium, the premium amount is credited to the 'Securities Premium' account, usually at the allotment stage unless specified otherwise. Ensure the Debenture account is credited only with the face value portion of the instalments.
Updated On: Feb 11, 2026
Hide Solution
Verified By Collegedunia
Solution and Explanation
Calculations:
- Number of Debentures: 2,000
- Face Value per Debenture: ₹500
- Premium: 10% of ₹500 = ₹50
- Application Money per Debenture: ₹200
- Allotment Money per Debenture (including premium): Face Value + Premium - Application Money = ₹500 + ₹50 - ₹200 = ₹350
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
|---|---|---|---|---|
| 1. Application Money Received | ||||
| Bank A/c | 4,00,000 | |||
| To 9% Debenture Application A/c | 4,00,000 | |||
| (Application money received on 2,000 debentures @ ₹200 per debenture) | ||||
| 2. Transfer of Application Money | ||||
| 9% Debenture Application A/c | 4,00,000 | |||
| To 9% Debentures A/c | 4,00,000 | |||
| (Transfer of application money to debentures account) | ||||
| 3. Allotment Money Due | ||||
| 9% Debenture Allotment A/c | 7,00,000 | |||
| To 9% Debentures A/c | 6,00,000 | |||
| To Securities Premium Reserve A/c | 1,00,000 | |||
| (Allotment money due on 2,000 debentures @ ₹350 per debenture including premium) | ||||
| 4. Allotment Money Received | ||||
| Bank A/c | 7,00,000 | |||
| To 9% Debenture Allotment A/c | 7,00,000 | |||
| (Allotment money received on 2,000 debentures) | ||||
Explanation:
- Entries 1 & 2: Record the receipt of application money and the transfer of that money to the debenture account.
- Entry 3: This entry is for making the allotment money due on the debentures. The debenture account is credited with the face value of the debentures being allotted (2,000 × ₹300 = ₹6,00,000). The Securities Premium Reserve is credited with the premium amount (2,000 × ₹50 = ₹1,00,000).
- Entry 4: Records the receipt of the allotment money in the bank account.
Total receipt will be application (2,000 × 200) + allotment (2,000 × 350) = 4,00,000 + 7,00,000 = 11,00,000
Was this answer helpful?
1
0
Top Questions on Debentures
- Define redemption of debentures. Explain any two methods of redemption.
- A company took a loan of ₹10,00,000 at 12% p.a. and offered ₹15,00,000 in 8% Debentures as collateral security. Calculate the finance cost for the year.
- G.S. Rai company ltd. purchased assets of the book value of Rs. 98,000 from another firm. It was agreed that purchase consideration be paid by issuing 11% debentures of Rs. 100 each. Assume debentures have been issued at discount of 20%. Identify the number of debentures issued by the company to the vendor:
- CUET (UG) - 2025
- Accountancy
- Debentures
- VX Ltd. issued 30,000, 8% debentures of ₹ 100 each at a discount of 10% redeemable at a certain rate of premium. On issue of these debentures, ‘Loss on issue of debentures account’ was debited with ₹ 4,50,000. The amount of premium on redemption of debentures was___.
- Pass necessary journal entries for issue of debentures for the following transactions:
(i) Kiero Ltd. issued 80,000, 9% debentures of ₹ 100 each at par, redeemable at a premium of 10%.
(ii) Naro Ltd. issued 50,000, 10% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%.
View More Questions
Questions Asked in CBSE CLASS XII exam
- Find the general solution of the differential equation \[ y\log y\,\frac{dx}{dy}+x=\frac{2}{y}. \]
- CBSE CLASS XII - 2026
- Differential Equations
- A square loop of side 0.50 m is placed in a uniform magnetic field of 0.4 T perpendicular to the plane of the loop. The loop is rotated through an angle of 60° in 0.2 s. The value of emf induced in the loop will be:
- CBSE CLASS XII - 2026
- Electromagnetic induction
A racing track is built around an elliptical ground whose equation is given by \[ 9x^2 + 16y^2 = 144 \] The width of the track is \(3\) m as shown. Based on the given information answer the following:
(i) Express \(y\) as a function of \(x\) from the given equation of ellipse.
(ii) Integrate the function obtained in (i) with respect to \(x\).
(iii)(a) Find the area of the region enclosed within the elliptical ground excluding the track using integration.
OR
(iii)(b) Write the coordinates of the points \(P\) and \(Q\) where the outer edge of the track cuts \(x\)-axis and \(y\)-axis in first quadrant and find the area of triangle formed by points \(P,O,Q\).
- CBSE CLASS XII - 2026
- Integration
- Consider a cylindrical conductor of length \( l \) and area of cross-section \( A \). Current \( I \) is maintained in the conductor and electrons drift with velocity \( \vec{v}_d \, (|\vec{v}_d| = \frac{eE}{m} \tau) \), where symbols have their usual meanings. Show that the conductivity of the material of the conductor is given by \[ \sigma = \frac{n e^2 \tau}{m}. \]
- CBSE CLASS XII - 2026
- Current Density
- The painting Hazrat Nizamuddin Auliya and Amir Khusro belongs to which sub-school of Deccan Miniature?
- CBSE CLASS XII - 2026
- Indian Miniature Paintings and Museums
View More Questions