A company issues the following debentures:(i) 10,000, 12% debentures o

1.	A company issues the following debentures:(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.
Answer» A company issues the following debentures: (i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years; (ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years; (iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years; (iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and (v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years. Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

A company issues the following debentures:(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

Answer»

A company issues the following debentures:

(i) 10,000, 12% debentures of Rs 100 each at par but redeemable at premium of 5% after 5 years;

(ii) 10,000, 12% debentures of Rs 100 each at a discount of 10% but redeemable at par after 5 years;

(iii) 5,000, 12% debentures of Rs 1,000 each at a premium of 5% but redeemable at par after 5 years;

(iv) 1,000, 12% debentures of Rs 100 each issued to a supplier of machinery costing Rs 95,000. The debentures are repayable after 5 years; and

(v) 300, 12% debentures of Rs 100 each as a collateral security to a bank which has advanced a loan of Rs 25,000 to the company for a period of 5 years.

Pass the journal entries to record the: (a) issue of debentures; and (b) repayment of debentures after the given period.

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