In April 2019, a company issues 12% ₹10,00,000 debentures at ₹97 but redeemable at ₹104. Redemption will be carried out by annual drawings of ₹2,50,000 (face value) commencing at the March 2020. You are required to show:

(i) Journal Entry on Issue of Debenture Date Particulars L.F. Debit (₹) Credit (₹) 01.04.19 Bank A/c Dr. 9,70,000 Loss on issue of Debenture Dr. 70000 To 12% Debenture A/c 10,00,000 To Premium on redemption of Debenture A/c 40000 (Being Allotment of debentures issued at a discount of ₹3 per debenture and redeemable at premium of ₹4 per debenture) Loss of issue of debenture should be written off each year, according to the ratio of amount outstanding debenture amount: Year Ratio Loss Written Off 1 10 (10/25)*70000 = 28000 2 7.5 (7.5/25)*70000 = 21000 3 5 (5/25)*70000 = 14000 4 2.5 (2.5/25)*70000 = 7000 Loss on Issue of Debenture A/c Date Particulars Amount in ₹ Date Particulars Amount in ₹ 01.04.2019 To 12% Debenture 30000 31.03.2020 By P & L A/c 28000 To Premium on Redemption 40000 31.03.2020 By Balance C/D 42000 Total 70,000 Total 70,000 01.04.2020 To Balance B/D 42000 31.03.2021 By P & L A/c 21000 31.03.2021 By Balance C/D 21000 Total 42,000 Total 42,000 01.04.2021 To Balance B/D 21000 31.03.2022 By P & L A/c 14000 31.03.2022 By Balance C/D 7000 Total 21,000 Total 21,000 01.04.2022 To Balance B/D 7000 31.03.2023 By P & L A/c 7000 Total 7000 Total 7000