[ISC] Q. 36 Issue of Debentures solution TS Grewal Class 12 (2023-24)

Solution of Question number 36 of the Issue of Debentures Chapter of TS Grewal Book ISC Board 2023-24 session?

Emm Ess Ltd. issued 10,000, 10% Debentures of ₹ 100 each at a discount of 10% on 1st April, 2021. The debentures were redeemable after 5 years at a premium of 10%. The amount was payable along with application. Interest was payable half-yearly. Applications were received for 15,000 debentures. Allotment was made to applicants for 10,000 Debentures and rest were sent letters of regret. Tax is deducted at source (TDS) @ 10%.

You are required to:

(i) Pass Journal entries for issue of Debentures.

(ii) Pass Journal entries for Interest on Debentures for the year ended 31st March, 2022, and

(iii) Prepare 10% Debentures Account.

Solution:-