Question

Leo Ltd. (a listed NBFC) redeems its 9,000, 10% Debentures of 100 each at a premium of 5% in instalments, as follows:

Date of Redemption	Debentures to be redeemed
31st March, 2021	2,000
31st March, 2022	2,000
31st March, 2023	5,000

You are required to prepare:

1. The Debenture Redemption Investment Account for the years 2021-22 and 2022-23.
2. 10% Debentures Account for the year 2021-22.

Answer 1

Dr.	Debenture Redemption Investment Account For the years 31st March, 2022 and 2023				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2021-2022			2021-2022
30 Apr 2022	To Bank A/c (DRI invested)	30,000
			Mar 31 2022	By Balance c/d	30,000
		30,000			30,000
2022-2023			2022-2023
1 Apr 2022	To Balance b/d	30,000		By Bank A/c (DRI realised)	75,000
30 Apr 2022	To Bank A/c (Purchase for 2023 redemption)	45,000
		75,000			75,000

 

10% Debentures Account For the year ending 31st March, 2022
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
01-04-2021	To Balance b/d	9,00,000	31-03-2022	By Debentureholders A/c (2,000 × ₹100)	2,00,000
			31-03-2022	By Balance c/d	7,00,000
	Total	9,00,000		Total	9,00,000

Working Note:

1. Debentures are of ₹ 100 each.
2. Total Face Value = 9,000 × ₹ 100 = ₹ 9,00,000
3. DRI to be made before instalments:
   • On 30-04-2021 for 2,000 debentures → ₹ 2,00,000 × 15% = ₹ 30,000
   • On 30-04-2022 for 3,000 debentures (5,000 – 2,000 redeemed already) → ₹ 3,00,000 × 15% = ₹ 45,000
4. Total DRI Realised on 31-03-2023 = ₹ 75,000