What is the journal entry for the receipt of the application money for debentures if the entire amount is received in one installment?
Answer & explanation
Correct answer: option 2
The correct answer is option 2-
Bank A/c Dr.
To Debenture Application & Allotment A/c
When the entire amount for debentures is received in one installment, the journal entry is as follows:
Debit the Bank Account (Bank A/c Dr.) because the company is receiving money from investors.
Credit the Debenture Application and allotment Account because this account represents the entire money received from investors.