Question

On 1st April, 2022, the following balances appeared in the books of Alpha Pvt. Ltd.

9% Debentures redeemable on 31st March, 2023, at a premium of 2%	₹ 50,00,000
Debenture Redemption Reserve	₹ 5,00,000

The Debenture Redemption Investment, which was purchased by the company on 1st April, 2022, was realised at 101% on the date of redemption and the debentures were redeemed on the due date. 

You are required to prepare the following accounts for the year 2022-23 in the books of Alpha Pvt. Ltd.

1. Debenture holders’ Account.
2. Debenture Redemption Investment Account.

Answer 1

i. 

Dr.	Debentureholders Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2023			2023
31 March	To Bank A/c	51,00,000	31 March	By 9% Debentures A/c	50,00,000
			31 March	By Premium on Redemption of Debentures	1,00,000
		51,00,000			51,00,000

ii.

Dr.	Debenture Redemption Investment Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2022			2023
1 April	To Bank A/c	7,50,000	31 March	By Bank A/c	7,57,500
2023			2023
31 March	To Gain on Sale of DRI	7,500
		7,57,500			7,57,500

Working Note:

Calculation of Investment = 50,00,000 × 15% = ₹ 7,50,000

Realised value = 7,50,000 × 10% = ₹ 7,57,500