i need it urgently

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Khushi

CA & CS Final

1367 Points Joined July 2008

Q. on 31st march2007 mohini ltd. , issued 4000-7% debnture of rs. 500 each at rs. 475 each. debentureholders had an option to convert their holding into 8% pref. share of rs. 100 each at a premium of rs. 25 per share. on 31st march 2008 one year's interest had accrued on these deb. and remained unpaid.

a holder of 100 deb. notified his intention to convert his holding into 8 % pref. shares.

prepare journal entries and Balance sheet.

i made only two journal entries -

1. debenture interest a/c dr. 1,40,000

To deb. int. outstanding 1,40,000

2. 7% deb. a/c Dr.50000

To discount on issue of deb. a/c 2500

To 8% pref. share capital a/c38000

To securities premium a/c9500

i want to know that will i have to pass journal entry for issuing debenture also as it was issued on 31st march 2007?

and i want to know where i will have to show discount on issue of deb. as its CR.

plzzzzzzzzzzzzzzzzzzzzzzz tell me - it's urgent..this Q. is from test paper3/2008 of company a/c and cost and mgmt accounting of CS executive

Replies (3)

saurabh divekar

nil

78 Points Joined December 2009

in this question it is not clearly mentioned that u have to prepare journal for so and so period, i mean to say particular period is not given so according to me u should write all the entries..

CA.Parsun Garg

JOB

1380 Points Joined June 2008

You have to show the journal entry for issue of debentures also, as you have to journalise the complete event.

Discount on issue of deb. can be deducted from earlier discount on issue of debentures which you must have been shown as MIsc. Expenditure on assets OR you can show it in P&L account. First Approach is suitable.