Question

R. Ltd. issued 8,000, 13% Debentures of 100 each at a discount of 5%payable as follows:On Application25On Allotment25On First and Final Call The balance amountPublic applied for 6,000 debentures. All the moneys were duly received. Expenseson issue of debentures amounted to 20,000. Directors decided to write off 1/5th of"Expenses on Issue A/c" and "Discount on Debentures Alc" from Statement ofP&L each year.Pass journal entries .

Answer 1

The journal entries for the given transaction consist of multiple entries including the application, allotment, and calls on debentures, as well as expense entries.

Step-by-step explanation:

The journal entries for the given transaction are as follows:

1. On Application: Debentures A/c Dr. 22,500
   To Share Application A/c 22,500
2. On Allotment: Share Allotment A/c Dr. 37,500
   To Debentures A/c 37,500
3. On First and Final Call: Debentures A/c Dr. 41,250
   To First Call A/c 41,250
4. To Second Call A/c (if applicable)
5. Expenses on Issue of Debentures A/c Dr. 16,000
   To Statement of Profit and Loss A/c 16,000
6. Expenses on Issue of Debentures A/c Dr. 4,000
   To Profit and Loss A/c 4,000