Health2Wealth Ltd. had share capital of ₹80,00,000 divided in shares of ₹100 each and 20,000, 8% Debentures of ₹100 each as part of capital employed. The company need additional funds of ₹55,00,000 for which they decided to issue debentures in such a way that they got required funds after issuing debentures of the same class as earlier, at 10% premium. These debentures were to be redeemed at 20% premium after 4 years. These debentures were issued on 01 October, 2021. You are required to

(a) Pass entries for issue of Debentures.

(b) Prepare Loss on Issue of Debentures Account assuming there was existing balance of Securities Premium Account of ₹2,80,000.

(c) Pass entries for Interest on debentures on March 31, 2022 assuming interest is payable on 30 September and 31 March every year.

Marks-6, CBSE:2022-23/Sample/Q-26

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