Y Ltd. issued 1,000 debentures of Rs 100 each at par, redeemable at a premium of 10 percent. Pass journal entries for issue and redemption.
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Solution and Explanation
1. On Issue of Debentures at Par
\[ \text{Bank A/c} \quad \text{Dr.} \quad \text{Rs }1,00,000 \\ \quad \quad \text{To Debentures A/c} \quad \text{Rs }1,00,000 \]
2. On Redemption at Premium
\[ \text{Debentures A/c} \quad \text{Dr.} \quad \text{Rs }1,00,000 \\ \text{Premium on Redemption A/c} \quad \text{Dr.} \quad \text{Rs }10,000 \\ \quad \quad \text{To Debentureholders A/c} \quad \text{Rs }1,10,000 \]
3. On Payment to Debentureholders
\[ \text{Debentureholders A/c} \quad \text{Dr.} \quad \text{Rs }1,10,000 \\ \quad \quad \text{To Bank A/c} \quad \text{Rs }1,10,000 \]
Final Answer:
\[ \boxed{\text{Debentures issued at par, redeemed at 10\% premium}} \]
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