The document discusses the issuance of debentures by companies. It states that companies must receive minimum subscription as stated in the prospectus before allotting debentures. Debentures can be issued for cash, consideration other than cash, or as collateral security. They can be issued at par, at a premium, or at a discount. The document provides journal entries for the issuance of debentures for cash both as a lump sum and in installments, as well as examples of entries for debentures issued at a premium or discount.

1. Issue of Debentures
MRK

2. Minimum Subscription
According to section 39(1) of the Companies Act,
2013, a company cannot allot securities unless
minimum subscription stated in the prospectus is
received. Such minimum subscription is therefore, to
be decided by the company. As per SEBI, 75% of
the issue should be subscribed before a company
allots debentures.

3. Issue of Debentures
From Consideration point of view
a.Issued for Cash
b.Issued for consideration other than cash
c.Issued as collateral security
From Price Point ofView
a.Issued at Par
b.Issued at Premium
c. Issued at Discount

4. ISSUE OF DEBENTURES FOR CASH
Accounting Entries: Entries can be explained as follows:
If amount of debentures is received in Lump Sum:
I. For receipt of Application Money:
Bank A/c ...Dr. (With application money received)
To Debentures Application
II. For allotment of Debentures:
Debentures Application Dr. (With the amount of application money on the
allotted debentures)
To ..%Debentures A/c
III. For Refund of Excess Application Money:
Debentures Application Dr. (With the application money refunded)
To Bank A/c

5. If amount of debentures is received in instalments:
(Debenture issued at Par)
i. For receipt of Application Money:
Bank A/c …Dr. (With application money received)
To Debentures Application A/c
ii. For allotment of Debentures:
Debentures Application A/c …Dr. (With the amount of application money on
the allotted debentures)
To %Debentures A/c
iii. For adjustment of Excess Debentures Application Money:
Debentures Application A/c …Dr. (With surplus application money on partially
accepted applications)
To Debentures Allotment A/c
iv. For Refund of Excess Debentures Application Money:
Debentures Application A/c …Dr. (With the application money refunded on
rejected applications)
To Bank A/c

6. v. ForAllotment Money Being Called:
Debentures Allotment A/c …Dr. (With the amount due on Allotment)
To % Debentures A/c
vi. For receipt ofAllotment Money:
Bank A/c …Dr. (With the amount actually received on allotment)
To Debentures Allotment A/c
vii. For calls money being called:
Debentures Call A/c …Dr. (With the money due on call)
To % Debentures A/c
viii. For receipt of call money:
Bank A/c …Dr. (With amount received on call)
To % Debentures Call A/c

7. Debenture issued at Premium
When entire amount is collected along with Application (Lump sum)
Bank A/c Dr.
To Debenture A/c
To Security Premium Reserve A/c
When amount is collected in Installments
When allotment money with premium is due;
Debenture allotment A/c Dr
To Debenture A/c
To Security Premium reserve A/c
When allotment money received
Bank A/c Dr
To Debenture allotment

8. Debenture issued at Discount
When entire amount is collected along with Application (Lump sum)
Bank A/c Dr.
Discount on Issue of Debenture A/c Dr
To Debenture A/c
When amount is collected in Installments
When allotment money is due;
Debenture allotment A/c Dr
Discount on Issue of Debenture A/c Dr
To Debenture A/c
When allotment money received
Bank A/c Dr
To Debenture allotment A/c

9. Titan Ltd issued 1000, 9% Debentures of Rs. 100 each. Show the journal
entries when the debentures are issued at
a) At Par
b) 10% Premium
c) 10% Discount
a) At Par
Bank A/c Dr. 100000
To 9% Debentures A/c 100000
(1000, 9% Debentures issued)
b) 10% Premium
Bank A/c Dr. 110000
To 9% Debentures 100000
To Security Premium A/c 10000
9% debentures issued at 10% Premium)
c) 10% Discount
Bank A/c Dr. 90000
Discount on issue of Debentures Dr. 10000
To 9% Debentures A/c 100000
(9% Debentures issued at 10% discount)
Bank A/c Dr 100000
To Deb App& Allot 100000
Deb App. & Allot Dr. 100000
To 9% Debenture A/c 100000

10. ThankYou