Swift Limited issued 10,000, 10% debentures of ₹ 100 each payable as follows:
On application ₹ 20
On allotment ₹ 20
On first call ₹ 30
On final call ₹ 30
The public applied for 14,000 debentures. Applications for 9,000 debentures were accepted in full; applications for 2,000 debe

Question

Swift Limited issued 10,000, 10% debentures of ₹ 100 each payable as follows:
On application ₹ 20
On allotment ₹ 20
On first call ₹ 30
On final call ₹ 30
The public applied for 14,000 debentures. Applications for 9,000 debentures were accepted in full; applications for 2,000 debentures were allotted 1,000 debentures and the remaining applications, were rejected. All money was duly received. Journalise the transactions.

Accepted Answer

>

> [!TLDR]
> 10,000 debentures allotted; 3,000 rejected (refund 60,000); excess 20,000 adjusted on allotment; all money received.
>
> 14,000 applied; 9,000 accepted in full, 2,000 allotted 1,000, and 3,000 rejected -> total allotted = 9,000 + 1,000 = 10,000 debentures.
> Application money @ Rs 20 = 14,000 x 20 = 2,80,000.
> Rejected 3,000 -> refund 3,000 x 20 = 60,000.
> Pro-rata category: applied 2,000, allotted 1,000; excess 1,000 x 20 = 20,000 adjusted on allotment.
>
> Journal Entries:
> 1. Bank A/c Dr 2,80,000 - To Debenture Application A/c 2,80,000.
> 2. Debenture Application A/c Dr 2,80,000 - To 10% Debentures A/c 2,00,000 (10,000 x 20); To Bank A/c 60,000 (refund); To Debenture Allotment A/c 20,000 (excess adjusted).
> 3. Debenture Allotment A/c Dr 2,00,000 (10,000 x 20) - To 10% Debentures A/c 2,00,000.
> 4. Bank A/c Dr 1,80,000 - To Debenture Allotment A/c 1,80,000 (2,00,000 - 20,000 adjusted).
> 5. Debenture First Call A/c Dr 3,00,000 (10,000 x 30) - To 10% Debentures A/c 3,00,000. …

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