Page 13 - LN ISSUE OF DEB

Issued at Premium, redeemable at Premium

Bank A/c Dr.

To Deb. Application A/c

(App. Money received)

Deb. Application A/c Dr.

Loss on issue of Deb. A/c Dr.

To Debentures A/c

To Securities premium A/c

To Premium on Redemption of Deb. A/c

(Being Deb. Issued at premium redeemable at premium)

Interest on Debentures

• Interest on debentures is paid periodically and it is the charge

against the profit.

• Students must remember that the TDS collected by the company
should be deposited to the Government (Income Tax Authorities).

Following Journal entries are recorded for this purpose:

Interest due to Debenture holders

Deb. Interest A/c Dr.

To Deb. Holders A/c

To Income Tax Payable A/c

Interest Paid to Debenture holders

Deb. Holders A/c Dr.

To Bank/Cash A/c

Income Tax paid to Government