H Ltd. purchased machinery worth Rs.99,000 from P Ltd. The payment was made by issue of 12% debentures of Rs.100 each. Pass the necessary journal entries for the issue of debentures when debentures are issued at 10% discount in the books of H Ltd.
H Ltd. purchased machinery worth Rs.99,000 from P Ltd. The payment was made by issue of 12% debentures of Rs.100 each. Pass the necessary journal entries for the issue of debentures when debentures are issued at 10% discount in the books of H Ltd.
Solution
✅ Correct Option: 2
At a discount each debenture is issued for . Number of debentures , so their face value is and the discount is .
The vendor's account is cleared for the purchase price of , discount is debited as a loss, and the Debentures Account is credited at face value .
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