Page 222 - ISCDEBK-12

8.16 Double Entry Book Keeping (Section A)—ISC XII

Solution: JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
2014
April 1 Computers A/c ...Dr. 7,50,000
Furniture and Fixtures A/c ...Dr. 2,50,000
To Vendor’s A/c 10,00,000
(Being the computers and office furniture purchased)
Vendor’s A/c ...Dr. 10,00,000
Discount on Issue of Debentures A/c ...Dr. 1,11,110
To 10% Debentures A/c 11,11,100
To Bank A/c 10
(Being the liability towards Vendor discharged by issue of 11,111;
10% Debentures of ` 100 each at a discount of 10%, balance paid
by cheque)
Bank A/c ...Dr. 13,75,000
To Debentures Application and Allotment A/c 13,75,000
(Being the application money received for 12,500; 8% Debentures
@ ` 110 per debenture)
Debentures Application and Allotment A/c ...Dr. 13,75,000
Loss on Issue of Debentures A/c ...Dr. 1,00,000
To 8% Debentures A/c 10,00,000
To Securities Premium Reserve A/c 1,00,000
To Bank A/c 2,75,000
To Premium on Redemption of Debentures A/c 1,00,000
(Being 10,000; 8% Debentures allotted being redeemable at
10% premium, application money adjusted against debentures
and securities premium reserve while balance refunded)
Sept. 30 Debentures’ Interest A/c ...Dr. 95,555
To Debentureholders’ A/c 95,555
(Being the interest for half-year ending 30th September, 2014 on
` 11,11,100 @ 10% p.a., and on ` 10,00,000 @ 8% p.a. due)
Debentureholders’ A/c ...Dr. 95,555
To Bank A/c 95,555
(Being the interest paid)
2015
March 31 Debentures’ Interest A/c ...Dr. 95,555
To Debentureholders’ A/c 95,555
(Being the interest for half-year ending 31st March, 2015 on
` 11,11,100 @ 10% p.a. and on ` 10,00,000 @ 8% p.a. due)
Debentureholders’ A/c ...Dr. 95,555
To Bank A/c 95,555
(Being the interest paid)
Securities Premium Reserve A/c ...Dr. 1,00,000
Statement of Profit and Loss ...Dr. 1,11,110
To Loss on Issue of Debentures A/c 1,00,000
To Discount on Issue of Debentures A/c 1,11,110
(Being the loss and discount on issue of debentures written off)
Statement of Profit and Loss ...Dr. 1,91,110
To Debentures’ Interest A/c 1,91,110
(Being the transfer of debentures’ interest to Statement of Profit and Loss)