B. Ltd. Issued 1,000, 12% Debentures of Rs 100 Each On April 01, 2014 at a Discount of 5% Redeemable At a Premium of 10%-Accountancy

B. Ltd. issued 1,000, 12% debentures of Rs 100 each on April 01, 2014 at a discount of 5% redeemable at a premium of 10%.

Give journal entries relating to the issue of debentures and debentures interest for the period ending March 31, 2015 assuming that interest is paid half yearly on September 30 and March 31 and tax deducted at source is 10%.

Date	Particulars		L.F.	Amount (Rs.)	Amount (Rs.)
2014
Apr, 01	Bank A/c	Dr.		95,000
	Loss on Issue on Debentures A/c	Dr.		15,000
	To 12% Debenture A/c				1,00,000
	To Premium on Redemption of Debentures A/c				10,000
	(Debenture issued at discount and redeemable at Premium)
Sept,30	Debenture Interest A/c	Dr.		6,000
	To Income Tax Payable A/c				600
	To Debenture Holders A/c				5,400
	(Amount of interest on 12% debentures Rs 1,00,000 due for 6 months )
Sept,30	Debenture Holders A/c	Dr.		5,400
	To Bank A/c				5,400
	(Being Interest paid to Debenture Holders)
2015
Mar,31	Debenture Interest A/c	Dr.		6,000
	To Income Tax Payable A/c				600
	To Debenture Holders A/c				5,400
	(Amount of interest on 12% Debentures Rs 1,00,000 due for 6 months and 10% tax deducted at source)
Mar,31	Debenture Holders A/c	Dr.		5,400
	To Bank A/c				5,400
	(Interest paid to Debenture Holders)
Mar,31	Profit and Loss A/c	Dr.		12,000
	To Debenture Interest A/c				12,000
	(Interest on debentures transferred to Profit and Loss Account)

Chapter-2 Issue and Redemption of Debentures-II

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