Grown Ltd. Issued 500, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the promoters for their services to incorporate at company. It also issued 100, 10% Debentures of ₹ 1,000 each credited as fully paid-up to the underwriters towards their commission. Pass the Journal entries.

Answer

(i) Dr. Incorparation Expenses A/c and Cr.Promoters' A/c by ₹ 5,00,000.
(ii) Dr. Promoters' A/c and Cr. 10% Debentures A/c by ₹ 5,00,000.
(iii) Dr. Underwriting Commission A/c and Cr. Underwriters' A/c by ₹1,00,000
(iv) Dr. Underwrites' A/c and Cr. 10% Debentures A/c ₹ 5,00,000.
(v) Dr. Statement of Profit and Loss by ₹6,00,000; Cr Incorporation Expenses A/c by ₹5,00,000 and Underwriting Commission A/c by ₹ 1,00,000.