Chartered Accountancy Session 1, Section A CPT Course Fundamentals of Accounting

Lecture 24 Issue of Debenture Quick Revision Notes

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Accounting Entries - Issued at par & Redeemable at par or discount

Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money to Debenture Account Debenture Application A/c Dr. To ..% Debenture A/c Accounting Entries Issued at discount &

Redeemable at par or discount Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money to Debenture Account Debenture Application A/c Dr. Discount on issue of debenture A/c Dr To ..% Debenture A/c Accounting Entries Issued at premium &

Redeemable at par or discount Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money to Debenture Account Debenture Application A/c Dr. To ..% Debenture A/c To Security Premium A/c

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Accounting

Entries Each

Co-venturer keeps

record of own

transactions only

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Accounting Entries Issued at par & Redeemable at premium

Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money Debenture Application A/c Dr. To ____ % Debenture A/c Call made consequent allotment Debenture Allotment A/c Dr. Loss on issue of debenture A/c Dr.

(Premium on redemption) To ____ % Debenture A/c To Debenture redemption premium A/c Accounting Entries Issued at discount

& Redeemable at premium Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money Debenture Application A/c Dr. To ____ % Debenture A/c Call made consequent allotment Debenture Allotment A/c Dr. Discount/Loss on issue of debenture A/c Dr. (Discount on issue + Premium on redemption) To ____ % Debenture A/c To Debenture redemption premium A/c

Accounting Entries Issued at premium & Redeemable at premium

Receipt of Application Money Bank A/c Dr. To Debenture Application A/c Transfer of Application Money Debenture Application A/c Dr. To ____ % Debenture A/c Call made consequent allotment Debenture Allotment A/c Dr. Loss on issue of debenture A/c Dr. (Premium on redemption) To ____ % Debenture A/c To Debenture Premium A/c To Debenture redemption premium A/c

Treatment of Discount on issue of Debentures

Redeemable after certain period of time - Written-off equally throughout life of debentures Redeemable at Different dates-Total amount written-off in the ratio of benefit derived from debenture loan (sum of the years digit method) Irredeemable Debentures-Written-off gradually over a long period

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