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Fit India Ltd. has paid-up share capital of ₹ 1,00,00,000 (divided into 5,00,000 Equity Shares of ₹ 20 each) and 10,000, 7% Debentures of ₹ 200 each. On 1st July, 2021, it further issued 7% Debentures at a premium of 10% redeemable at 25% premium to meet the long-term funds requirement of ₹ 1,65,00,000. The issue price was payable along with application. Balance in Securities Premium Account after the issue of debentures of ₹ 25,00,000. Loss for the year ended 31st March, 2022 is ₹ 10,00,000.

You are required to:

(i) Pass Journal entries for issue of Debentures.

(ii) Prepare Loss on Issue of Debentures Account.

(iii) Pass Journal entries for interest on debentures, If interest is payable on 30th September and 31st March each year.

[Ans.: Loss on Issue of Debentures – ₹ 37,50,000; Interest on Debentures paid: on 30th September, 2021 – ₹ 3,32,500; On 31st March, 2022 – ₹ 5,95,000.]

Anurag Pathak Changed status to publish October 10, 2023
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