Gladiators Ltd. issued 10,000; 8% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 5% payable along with application

Gladiators Ltd. issued 10,000; 8% Debentures of ₹ 100 each at a discount of 5%, redeemable at a premium of 5% payable along with application. It had balance of ₹ 70,000 in Securities Premium and ₹ 50,000 in Capital Reserve. The debentures were fully subscribed and amounts were duly received.

Pass the necessary Journal entries for issue of debentures and writing off Loss on issue of Debentures.

[Ans.: Dr. Securities Premium A/c by ₹ 70,000 and Statement of Profit & Loss (Finance Cost) by ₹ 30,000; Cr. Loss on Issue of Debentures A/c by ₹ 1,00,000.]