[ISC] Q. 31 Solution of Issue of Debentures TS Grewal ISC 2023-24 Edition

Ashima Ltd. issued 20,000, 9% Debentures of ₹ 100 each, payable in four equal amounts on application, allotment and two calls. Applications were received for 25,000 debentures. Debentures were allotted on pro rata basis to all the applicants. One applicant to whom 100 debentures were allotted paid full amount while remitting the allotment money and another debentureholder who was allotted 120 debentures did not pay the final call. The remaining debentureholders paid the amount due as and when called to pay.

Additional Information:

1. (i) First call was made 4 months after the date of allotment and the final call was made 6 months after the first call.
2. (ii) Company received the Calls-in-Arrears on 120 debentures 4 months after the final call became due with interest on Calls-in-Arrears.

The Articles of Association of the company provided to charge interest on Calls-in-Arrears @ 10% p.a. and to allow interest on Calls-in-Advance @ 12% p.a.

Pass necessary Journal entries. The company paid the interest due on the date of final call in Cash.