Question

On 1 August 2020, Candy Ltd issued a disclosure document inviting applications for 10,000 of $80 debentures at par, payable in full on application. The debentures carry an 8% annual interest charge and will be redeemed at nominal value in 5 years. The interest payment is made semi-annually on 31 December and 30 June each year. By 30 September 2020, Candy Ltd received application money for 11,000 debentures. On 1 October 2020, Courtney Ltd issued 10,000 debentures and refunded monies to 1,000 unsuccessful applicants. Required: Prepare a general journal template as per example below based on the information above, for Candy Ltd for the year ended 30 June 2021. Include a narration.

Answer 1

Date	Account Title	Dr	Cr
30-Sep-20	Bank	880,000
	Debenture Application		880,000
	(On receipt of Application money for
	11000 debentures at $80 at par)
	(11000 X 80)
1-Oct-20	Debenture Application	800,000
	8 % Debentures		800,000
	(Allotment of 10000 Debenture)
	(10000 X 80)
1-Oct-20	Debenture Application	80,000
	Bank		80,000
	(Refund of excess Application)
	(880000-800000)
31-Dec-20	Interest on Debenture	16,000
	Bank		16,000
	(Interest on Debentures paid
	(800000X 8% /12 months) X 3 months
30-Jun-21	Interest on Debenture	32,000
	Bank		32,000
	(Interest on Debentures paid
	(800000X 8% /12 months) X 6months