Debenture

Debit Own debentures account and then cancel.

CA Suraj Lakhotia

Admin

09-Sep-20 16:10

But fr immediate cancelation no need to create own debentures account like dat was told in video

Thread Starter

Shruthi V

CA Inter

★ 0

09-Sep-20 16:17

That is also fine.

CA Suraj Lakhotia

Admin

09-Sep-20 16:28

Ya tl me the journal entry sir in dis case with amounts

Thread Starter

Shruthi V

CA Inter

★ 0

09-Sep-20 16:40

Debentures Dr. (Nominal Value) Debenture INterest To Bank To Capital Reserve (Profit)

CA Suraj Lakhotia

Admin

09-Sep-20 18:22

Is this crct

Thread Starter

Shruthi V

CA Inter

★ 0

09-Sep-20 18:40

Journal entries are recorded in chronological order. Hence the entries should be made for when debentures are purchased and cancelled as well. When purchased, Debenture redemption a/c.... Dr(cost) Debenture interest a/c...........Dr(interest accrued) To Bank a/c. (Being debentures purchased) As we just only purchased the debentures and not cancelled, debentures a/c cannot be debited as on that date. Later when we cancel the debentures the following entry will be passed. Debentures a/c...........Dr(Face value) P&l a/c(if any loss)....Dr To Debenture Redemption a/c(cost) To capital reserve(if any profit) (Being debentures cancelled) Here profit should be clearly credited to capital reserve because this profit is arised out of capital item(Debt capital) it is called capital profit. But loss should be written-off in p&l a/c. Hope it helps!!!

VIJAYA SARADHI MAGANTI

CA Inter

★ 850

10-Sep-20 00:46