Page 46 - DEBK12

Chapter 9 . Company Accounts—Issue of Debentures 9.5

Debentureholders’ A/c ...Dr. 33,750
To Bank A/c 33,750
(Interest paid for quarter ended 30th September, 2019)
TDS Payable A/c ...Dr. 3,750
To Bank A/c 3,750
(TDS deposited in the Government Account)
Dec. 31 Debentures’ Interest A/c ...Dr. 37,500
To Debentureholders’ A/c 33,750
To TDS Payable A/c 3,750
(Interest due for the quarter ended 31st December, 2019 and tax
deducted at source @ 10%)
Debentureholders’ A/c ...Dr. 33,750
To Bank A/c 33,750
(Interest paid for the quarter ended 31st December, 2019)
TDS Payable A/c ...Dr. 3,750
To Bank A/c 3,750
(TDS deposited in the Government Account)
2020
Mar. 31 Debentures’ Interest A/c ...Dr. 37,500
To Debentureholders’ A/c 33,750
To TDS Payable A/c 3,750
(Interest due for the quarter ended 31st March, 2020)
Debentureholders’ A/c ...Dr. 33,750
To Bank A/c 33,750
(Interest paid for the quarter ended 31st March, 2020)
TDS Payable A/c ...Dr. 3,750
To Bank A/c 3,750
(TDS deposited in the Government Account)
Statement of Profit and Loss (Finance Cost) ...Dr. 1,50,000
To Debentures’ Interest A/c 1,50,000
(Interest on debentures transferred to Statement of Profit and Loss)
Statement of Profit and Loss (Finance Cost) ...Dr. 90,000
To Discount on Issue of Debentures A/c 90,000
(Discount on issue of debentures written off from
Statement of Profit and Loss)
Illustration 3.
SKS Ltd. issued 1,00,000; 8% Debentures of ` 10 each at ` 12 on 1st April, 2019. The issue was fully
subscribed. In terms of the issue of debentures, interest was payable yearly at the end of the financial
year. Interest and TDS were paid on 31st March, 2020. TDS was deducted on interest @ 10%.
Pass Journal entries for the above transactions.
Solution: JOURNAL OF SKS LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
2019
April 1 Bank A/c ...Dr. 12,00,000
To Debentures Application and Allotment A/c 12,00,000
(Application money received on 1,00,000; 8% Debentures @ ` 12)
Debentures Application and Allotment A/c ...Dr. 12,00,000
To 8% Debentures A/c 10,00,000
To Securities Premium Reserve A/c 2,00,000
(1,00,000; 8% Debentures allotted to debenture applicants)