Debentures

Machinery a/c                                                         Dr.          320,000

      To Debenture application and allotment a/c                                    320,000

Debenture Applictn & Allotmnt a/c                      Dr.        320,000

Discount on issue of debentures a/c                 Dr.         80,000

          To 10% Debentures a/c                                                                    400,000

Machinery A/c___________________________________Dr. 400000

Discount os Issue of Debentures A/c_(500000*20%)____ Dr. 100000

               To 10% Debentures A/c  (400000*100/80)                                              500000

i made a mistake there

Machinery a/c                                                         Dr.          400,000

      To Debenture application and allotment a/c                                      400,000

Discount on issue of debentures a/c                     Dr.           100,000

          To 10% Debentures a/c                                                                    500,000

u can make a one  entry like me or dual entry like joseph

amount of debentuer    =  100-20%of100 =80

no. of 10 % debentures issue  =   400000/80 

                                               =  5000

Originally posted by : Rajnikant Vadigoppula
	Machinery A/c___________________________________Dr. 400000 Discount os Issue of Debentures A/c_(500000*20%)____ Dr. 100000                To 10% Debentures A/c  (400000*100/80)                                              500000

this is right

This combined entry is perfect.

thanx friends
 

Machinery Account .......Dr 400000

Discount on debentures...Dr 100000

10% debenture...............Cr 500000

its a right Accounting treatment

THE DEBENTURES SHOULD BE CREDITED WITH 5LACS AS AMOUNT PAYABLE=COST OF MACHINERY (4,00,000/-) WHICH IS 80%. (20% DISCOUNT).

1) Machinery taken over

Machinery A/c                                                                    Dr. 4,00,000

       To Vendor A/c                                                                                     4,00,000

2) Issue of Debenture for consideration

Vendor A/c                                                                             Dr. 4,00,000

Discount on Issure of Debentures A/c (5,000x20)             Dr. 1,00,000

         To 10% Debentures A/c (5,000x 100)                                        5,00,000