Lec-24 - xxx Interest payable Interest Exp. A/c xxx...

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Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-24 Limited Companies
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Basic Scenario 5% Debenture Amount Opening balance 25,000 Issued during the year 20,000 Closing balance 45,000
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Scenario-1 Issued debenture on opening date Rs. 45,000. Interest on debenture = 45,000 x 5% = 2,250
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Scenario-2 Issued debenture on mid of the year. Interest on debenture = 25,000 x 5% = 1,250 = 20,000 x 5% x 6/12 = 500 1,750
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Basic Scenario 5% Debenture Amount Opening balance 25,000 Redemption (15,000) Closing balance 10,000
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Scenario-3 Redemption of debenture on opening date . Interest on debenture = 10,000 x 5% = 500
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Scenario-4 Redemption of debenture on mid of the year. Interest on debenture = 10,000 x 5% = 500 = 15,000 x 5% x 6/12 = 375 875
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Scenario-5 Redemption of debenture on closing date Interest on debenture = 25,000 x 5% = 1,250
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Income Tax
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Journal Entries Interest expense paid Interest Exp. A/c xxx Bank A/c
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Unformatted text preview: xxx Interest payable Interest Exp. A/c xxx Interest payable A/c xxx Income Tax Expense 1. Current Tax 2. Deferred Tax Current Tax 1. Tax on current year’s tax profit 2. Based on estimates Deferred Tax To create deferred tax liability Deferred tax Exp. A/c xxx Deferred tax liability A/c xxx Increase in deferred tax liability Deferred tax Exp. A/c xxx Deferred tax liability A/c xxx Decrease in deferred tax liability Deferred tax liability A/c xxx Deferred tax Exp. A/c xxx Income Tax Expense in Income Statement Current Tax Provision of tax current year xxx Add under provision xxx OR Less over provision (xxx) xxx Deferred tax Add increase in deferred tax liability OR Less increase in deferred tax liability xxx Expense for the year xxx Balance sheet Current liability Provision for tax current year Non current liability Deferred tax liability...
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This note was uploaded on 05/15/2010 for the course ACCOUNTING B97702031 taught by Professor Lyz during the Spring '09 term at Punjab Engineering College.

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Lec-24 - xxx Interest payable Interest Exp. A/c xxx...

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