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प्रश्न
On 1st April 2015, Mayfair Ltd. issued 4,000 9% debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 8%. The debentures were redeemable on 31st March 2019. The company created the necessary minimum amount of debenture redemption reserve and purchased the required amount of debenture redemption investments as per the provisions of Companies Act, 2013.
Pass the necessary journal entries for the redemption of debentures.
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उत्तर
In the books of Mayfair Ltd.
Journal
| Date | Particulars | L.F. |
Debit Amount(₹) |
Credit Amount(₹) |
|
| 2018 |
|
|
|||
| March 31 | Surplus i.e. Balance as per Statement of Profit & Loss A/c | Dr. |
1,00,000 |
|
|
| To Debenture Redemption Reserve A/c |
|
1,00,000 |
|||
| Being 25% of 4,000 debentures transferred to DRR) |
|
|
|||
|
|
|
||||
| 2018 April 30 |
Debenture Reserve Investment A/c | Dr. |
60,000 |
|
|
| To Bank A/c |
|
60,000 |
|||
| (Being Debenture Redemption Investment made at 15% for 4,000 debentures ) |
|
|
|||
|
|
|
||||
| 2019 March 31 |
Bank A/c | Dr. |
60,000 |
|
|
| To Debenture Reserve Investment A/c |
|
60,000 |
|||
| (Being debenture reserve securities matured) |
|
|
|||
|
|
|
||||
| 2019 March 31 |
9% Debenture A/c | Dr. |
4,00,000 |
|
|
| Premium on Redemption A/c | Dr. |
32,000 |
|
||
| To Debenture holder’s A/c |
|
4,32,000 |
|||
| (For amount due on debenture holders) |
|
|
|||
|
|
|
||||
| 2019 March 31 |
Debenture holders A/c | Dr. |
4,32,000 |
|
|
| To Bank A/c |
|
4,32,000 |
|||
|
|
(For debentures paid) |
|
|
||
|
|
|
|
|||
|
2019 March 31 |
Debenture Redemption Reserve A/c | Dr. |
1,00,000 |
|
|
| To General Reserve A/c |
|
1,00,000 |
|||
|
|
(For DRR transferred to General reserve) |
|
|
संबंधित प्रश्न
How would you deal with ‘Premium on Redemption of Debentures’?
What is meant by the redemption of debentures by “Purchase in the Open Market”?
Short Answer Question
Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?
Differentiate between redemption of debentures out of capital and out of profits.
Describe the steps for creating a sinking fund for the redemption of debentures.
What is meant by the conversion of debentures? Describe the method of such a conversion.
X.Ltd. purchased a Machinery from Y. Ltd. at an agreed purchase consideration of Rs. 4,40,000 to be satisfied by the issue of 12% debentures of Rs. 100 each at a premium of Rs 10 per debenture. Journalise the transactions.
A company issued debentures of the face value of Rs 5,00,000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs,1,00,000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.
Calculate the amount of discount to be written-off each year. Give journal entries also.
A company issued 10% Debentures of the face value of Rs,1,20,000 at a discount of 6% on April 01, 2011. The debentures are payable by annual drawings of Rs 40,000 commencing from the end of third year.
How will you deal with discount on debentures?
Show the discount on debentures account in the company ledger for the period of duration of debentures. Assume accounts are closed on March 31 every year.
What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice: (a) when debentures were issued at par with a condition to redeem them at premium; (b) when debentures were issued at premium with a condition to redeem that at par; and (c) when debentures were issued at discount with a condition to redeem them at premium?
Convertible debentures cannot be issued at a discount if ______.
Which of the following methods are there for redemption of debentures?
Give the necessary journal entries at time of redemption of debentures
"X Ltd. issued 500, 9% debentures of Rs.100 each at par and redeemable at par at the end of 5 years out of capital."
Shashi Ltd. decided to redeem its 8,000, 11% Debentures of ₹ 100 each at a premium of 10%. The minimum amount transferred to Debenture Redemption Reserve will be: (assume that the company is not listed)
Which of the following is not true about Debenture Redemption Reserve (DRR)?
Premium on Redemption of Debentures Account is a ______.
Premium on redemption of debentures is generally provided at the time of ______.
Sources of finance for the redemption of debentures are ______.
What is the nature of Premium on Redemption of Debenture Account?
