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M.12 An Aid to Accountancy—CBSE XII

3. Total Capital of New Firm = ` 1,96,500 + ` 1,98,000 + ` 91,500 + ` 1,00,000 – ` 1,86,000 (Cash Available)
= ` 4,00,000.
4. Calculation of Actual Cash to be paid off or brought in: A (`) C (`)
(i) New Capital (` 4,00,000 in the ratio of 5 : 3) 2,50,000 1,50,000
(ii) Adjusted Old Capital 1,96,500 91,500
(iii) Cash to be brought in (i – ii) 53,500 58,500

9. JOURNAL OF X LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Bank A/c ...Dr. 3,20,000
To Debentures Application A/c 3,20,000
(Being the application money received)
Debentures Application A/c ...Dr. 3,20,000
To 10% Debentures A/c 2,00,000
To Debentures Allotment A/c 40,000
To Bank A/c (2,000 × ` 40) 80,000
(Being the application money adjusted)
Debentures Allotment A/c ...Dr. 3,00,000
To 10% Debentures A/c 3,00,000
(Being the amount due on allotment)
Bank A/c ...Dr. 2,60,000
To Debentures Allotment A/c 2,60,000
(Being the amount received against allotment)
Or
In the Books of State Bank of India
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

At the time of Issue of Debentures
2018
June 1 Bank A/c (6,000 × ` 105) ...Dr. 6,30,000
To Debentures Application and Allotment A/c 6,30,000
(Being the application money received for 6,000 debentures @ ` 105
per debenture)
Debentures Application and Allotment A/c ...Dr. 6,30,000
To 10% Debentures A/c (6,000 × ` 100) 6,00,000
To Securities Premium Reserve A/c (6,000 × ` 5) 30,000
(Being 6,000; 10% debentures issued at a premium of 5% and
redeemable at par)
On Redemption of Debentures
2019
Aug. 31 10% Debentures A/c ...Dr. 6,00,000
To Debentureholders’ A/c 6,00,000
(Being the amount due to debentureholders on redemption)
Debentureholders’ A/c ...Dr. 6,00,000
To Bank A/c 6,00,000
(Being the amount due to debentureholders paid)
Note: According to Rule 18(7)(b) of the Companies (Share Capital and Debentures) Rules, 2014, a Banking
company is not required to create Debentures Redemption Reserve (DRR). Since, it is not required to create
DRR, it will not invest in DRI.