Saturday, December 20, 2025

HSC Accounts Board Paper Solution: Issue of Debentures (Joshi-Patil Ltd)

OR - Issue of Debentures

Question: Joshi - Patil Ltd. issued 2,000, 10% debentures of ₹ 100 each, payable ₹ 20 on application and the balance on allotment.

Company received applications for 2,500 debentures, out of which applications for 2,000 were alloted fully and remaining applications were rejected and the money refunded.

Journalise the above transactions, assuming that all the sums were received.

Solution: Journal Entries in the books of Joshi - Patil Ltd.

Date Particulars L.F. Debit (₹) Credit (₹)
(i) Bank A/c ... Dr.
To Debenture Application A/c (Being application money received on 2,500 debentures @ ₹ 20 each) 		50,000
50,000
(ii) Debenture Application A/c ... Dr.
To 10% Debentures A/c
To Bank A/c
(Being application money transferred to Debentures A/c for 2,000 debentures) (Being refund of excess application money on 500 debentures) 		50,000
40,000
10,000
(iii) Debenture Allotment A/c ... Dr.
To 10% Debentures A/c (Being allotment money due on 2,000 debentures @ ₹ 80 each) 		1,60,000
1,60,000
(iv) Bank A/c ... Dr.
To Debenture Allotment A/c (Being allotment money received in full) 		1,60,000
1,60,000
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