Mittal Ltd. Invited applications for 50,000, 10% Debentures of ₹10 each at par, payable the full amount at the time of application. Applications were received for 60,000 Debentures. Debentures were allotted and excess money was refunded. By how much amount the bank account be credited?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹1,00,000
Bank account is credited with Excess money received = 10,000 debentures x ₹10
= ₹1,00,000
The following 2 journal entry is passed for this-
1) Bank A/c Dr. (60,000 x 10) ₹6,00,000
To Debenture Application & Allotment A/c (60,000 x 10) ₹6,00,000
(Money received by company)
2) Debenture Application & Allotment A/c Dr. (60,000 x 10) ₹6,00,000
To 10% Debentures A/c (50,000 x 10) ₹5,00,000
To Bank A/c (10,000 x 10) ₹1,00,000