Q.Show Journal entries of the following issue of Debentures:

At a 5% premium on 1,000 debentures of 100, the premium is 5 per debenture (5,000 total); so 1,05,000 is received but only 1,00,000 goes to the Debenture A/c and 5,000 to Securities Premium. At par, 2,000 debentures of 100 simply bring in 2,00,000.

Journal Entries

(i) 1,000, 10% Debentures of 100 each issued at a premium of 5% (amount received in full):

(Being 1,000 debentures of 100 each issued at a premium of 5 per debenture)

Working: Face value = 1,000 x 100 = 1,00,000; Premium = 1,00,000 x 5% = 5,000; Total received = 1,05,000.

(ii) 2,000, 8% Debentures of 100 each issued at par (amount received in full): …