Issued 4 000 12 debentures of Rs 100 each at a premium of 4 redeemable at a premium of 10 In such ca...........

General Accounting Principles Accounting For Debentures

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Issued 4,000, 12% debentures of Rs 100 each at a premium of 4%, redeemable at a premium of 10%. In such case :

Loss on Issue will be debited by Rs 24,000

Loss on Issue will be debited by Rs 56,000

Loss on Issue will be debited by Rs 40,000

Premium on Redemption will be credited by Rs 24,000

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Explanation:

Bank A/c (4,000*104) Dr. Rs. 4,16,000
To debenture application & allotment Rs. 4,16,000
(being Rs.4,00,000 debentures of Rs. 100 each issued @ 104)

D?ebenture application & allotment A/c Dr. Rs. 4,16,000
Loss on issue of debentures A/c Dr. Rs. 40,000
To 12% debentures A/c Rs. 4,00,000
To securities premium reserve A/c Rs.16,000
To premium on redemption of debenture A/c Rs. 40,000 ( Rs. 4,00,000*10%)
( being application amount transferred to debenture and securities premium account)