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प्रश्न
On 1st April, 2016, following were the balances of Blue Bird Ltd.:
| 10% Debentures (redeemable on 30th September, 2017) | ₹ 15,00,000 |
| Debentures Redemption Reserve | ₹ 2,00,000 |
The company met the requirements of the Companies Act, 2013 regarding Debentures Redemption Reserve and Investment and redeemed the debentures.
Pass necessary Journal entries for the above transactions in the books of the company.
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उत्तर
Journal
|
Date |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
| 2017 | |||||
|
March 31 |
Statement of Profit and Loss |
Dr. |
|
1,75,000 |
|
| To Debenture Redemption Reserve A/c | 1,75,000 | ||||
| (Surplus amount is transferred to DRR) | |||||
|
April 30 |
Debenture Redemption Investment A/c | Dr. | 2,25,000 | ||
| To Bank A/c | 2,25,000 | ||||
| (Investment is made in specified securities equal to 15% of the value of debentures redeemed) | |||||
|
Sept. 30 |
10% Debentures A/c |
Dr. |
|
15,00,000 |
|
|
|
To Debentureholders A/c |
|
|
|
15,00,000 |
|
|
(10% Debentures due for redemption) |
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30 |
Bank A/c | Dr. | 2,25,000 | ||
| To Debenture Redemption Investment A/c | 2,25,000 | ||||
| (Investment made in specified securities, now encashed) | |||||
|
Sept. 30 |
Debentureholders' A/c |
Dr. |
|
15,00,000 |
|
|
|
To Bank A/c |
|
|
|
15,00,000 |
|
|
(Amount paid to debentureholders) |
|
|
|
|
|
|
|
|
|
|
|
|
Sept. 30 |
Debenture Redemption Reserve A/c |
Dr. |
|
3,75,000 |
|
|
|
To General Reserve A/c |
|
|
|
3,75,000 |
|
|
(DRR amount is transferred to General Reserve) |
|
|
|
|
Working Notes:
| Amount for DRR (25% of Debentures Issued) = `15,00,000 xx 25/100` = | Rs 3,75,000 |
| Less : Amount already exist in DRR = | Rs 200000 |
| DRR to be created for redemption = | Rs 1,75,000 |
Investment made in Specified Securities
`= 15,00,000 xx 15/100` = Rs 2,25,000
*As per circular no. 04/2015 issued by Ministry of Corporate Affairs (dated 11.02.2013), every company required to create/maintain DRR shall on or before the 30th day of April of each year, deposit or invest, as the case may be, a sum which shall not be less than fifteen percent of the amount of its debentures maturing during the year ending on the 31st day of March next following year. Accodingly, entries for DRR and Investment have been passed a year before redemption year.
Note: Entries for interest on debentures have been ignored in the above solution as the question was silent in this regards. However, the students' may journalise the entries related to interest on debentures as given below.
Journal
|
Date |
Particular |
|
L.F. |
Debit Amount |
Credit Amount |
|
2017-18 |
|
||||
|
Mar. 31 |
Debenture Interest A/c |
Dr. |
75,000 |
||
|
|
To Debentureholders’ A/c |
|
75,000 |
||
|
|
(Interest on 10% debentures due) |
|
|||
|
|
|
||||
|
Mar. 31 |
Debentureholders’ A/c |
Dr. |
75,000 |
||
|
|
To Bank A/c |
|
75,000 |
||
|
|
(Payment of interest to debentureholders’) |
|
|||
|
|
|
||||
|
Mar. 31 |
Statement of Profit and Loss |
Dr. |
75,000 |
||
|
|
To Debenture Interest A/c |
|
75,000 |
||
|
|
(Transfer of debenture interest to Statement of Profit and Loss) |
|
APPEARS IN
संबंधित प्रश्न
State the provisions of the Companies Act, 2013 for the creation of 'Debenture Redemption Reserve'.
Nirbhai Chemicals Ltd. issued ₹ 10,00,000; 6% Debentures of ₹ 50 each at a premium of 8% on 30th June, 2018 redeemable on 30th June, 2019. The issue was fully subscribed. Pass Journal entries for issue and redemption of debentures. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures? Also, state how much amount should be invested in specified securities?
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Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest or loss on issue of debentures.
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Pass Journal entries for redemption of debentures.
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Pass necessary Journal entries regarding issue, transfer to DRR, investment, and redemption of debentures.
Tata Motors Ltd. issued 40,000;7% Debentures of ₹ 100 each on 1st July,2009 redeemable at premium of 5% as under:
On 31st March,2015 16,000 Debentures
On 31st March,2016 16,000 Debentures
On 31st March,2017 8,000 Debentures
It was decided to transfer amount out of profit to Debentures Redemption Reserve ₹ 2,00,000 on 31st March, 2012; ₹ 4,00,000 on 31st March , 2013 and balance on 31st March, 2014. It invested the required amount in terms of the Companies Act, 2013 in Government Securities and decided to realise them after last redemption . Paas journal entries ignoring interest .
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(a) Issue 47,500 equity shares at a premium of ₹ 100 per share .
(b) Obtain a long-term loan from bank which was available at 12% per annum.
(c) Issue 9% Debentures at a discount of 5%.
After evaluating these alternatives , the company decided to issue 1,00,000,9% Debentures on 1st April,2008. The face value of each debentures was ₹ 100 . These debentures were redeemable in four installments starting from the end of third year, which were as follows:
| Year | III | IV | V | VI |
| Amount (₹) | 10,00,000 | 20,00,000 | 30,00,000 | 40,00,000 |
Prepare 9% Debenture Account form 1st April, 2008 till all the debentures were redeemed.
Shahi Ltd. decided to redeem its 8,000, 11% debentures of ₹ 100 each at a premium of 10%. The minimum amount transferred to the debenture redemption reserve will be:
Choose the appropriate alternative from the given options:
Madura Ltd. decided to redeem its 10,000, 10% debentures of ₹100 each at a premium of 8%. The minimum amount transferred to debenture redemption reserve will be :
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.
Relay Ltd. (an unlisted Non NBFC) redeems its 8,000, 10% Debentures of ₹ 100 each in instalments as follows:
| Date of Redemption | Debentures to be redeemed |
| 31st March, 2019 | 2,000 |
| 31st March, 2020 | 5,000 |
| 31st March, 2021 | 1,000 |
On the basis of the above details, what will be the amount of Debenture Redemption Reserve which the company will transfer to General Reserve on 31st March, 2021?
What is the maximum amount of debentures which an unlisted company, other than a NBFC and HFC, can redeem out of its capital?
Sunrise Ltd. a listed NBFC, had outstanding 20,000, 7% Debentures of ₹ 100 each, due for redemption on 31st March, 2022.
As per the provisions of the Companies Act, 2013, what amount, if any, does the company need to transfer to Debenture Redemption Reserve, before it can redeem the debentures?
Jerome Ltd., an unlisted manufacturing company, had 20,000, 6% Debentures of ₹100 each due for redemption at par on 31st March, 2022. On this date the company had the required amount of ₹ 2,00,000 in its Debenture Redemption Reserve.
The Debenture Redemption Investment which was purchased on 30th April, 2021, was realised at 98% on the date of redemption and the debentures were redeemed on the due date.
You are required to pass journal entries in the books of the company for the year 2021-22. (Ignore interest on debentures).
On 1st April, 2017, Gabriel Ltd., a listed company, issued 3,000, 8% Debentures of ₹ 100 each. One-third of the Debentures were redeemed at par on 31st March, 2021 and the remaining two-third on 31st March, 2022. The company paid interest on debentures annually on 31st March.
After meeting the requirements of the Companies Act, 2013, regarding Debenture Redemption Investment, the company redeemed the debentures.
You are required to record necessary journal entries in the books of the company only on 31st March, 2022; including entries for interest on debentures.
On 1st April, 2022, Resorts Ltd. (a listed construction company) had 60,000, 5% Debentures of ₹100 each due for redemption at par on 31st March, 2023.
As per the law, investment was made in a fixed deposit of a bank on 30th April, 2022, earning interest @5% per annum.
Tax @10% was deducted by the bank on the interest.
You are required to pass necessary journal entries in the year of redemption of debentures, including entries for interest on Debenture Redemption Investment. (Ignore the interest on Debentures)
Ronny Ltd. (an unlisted construction company) redeems its 7,000, 10% Debentures of ₹100 each at a premium of 5% in instalments, as follows:
| Date of Redemption | Debentures to be redeemed |
| 31st March, 2022 | 2,000 |
| 31st March, 2023 | 3,000 |
| 31st March, 2024 | 2,000 |
You are required to prepare for the year 2023-24:
- General Reserve Account.
- Debenture holders’ Account. (Ignore interest on Debentures).
