XZ Ltd. invited applications for issuing 5000, 9% debentures of ₹100 each. The amount was payable as follows:

On application….. ₹40 per debenture

On allotment….. Balance

Applications for 10,000 debentures were received. Applications for 2,000 debentures were rejected and the application money of these applicants was refunded to them. Pro-rata allotment was made to the remaining applicants. Excess application money received with those applications against which pro-rata allotment was made was adjusted towards amount due on allotment.

Pass the necessary journal entries for the issue of debentures in the books of XZ Ltd.

Marks-3, CBSE:2021-22/Compartment/Q-6*

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