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प्रश्न
Manish Ltd. issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2017. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2019. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2018 and ₹ 10,00,000 on 31st March, 2019.
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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उत्तर
Journal
|
Date |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
2017 |
|
|
|
|
|
|
April 01 |
Bank A/c |
Dr. |
|
40,00,000 |
|
|
|
To Debenture Application A/c |
|
|
40,00,000 |
|
|
|
(Debenture application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
40,00,000 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
2,00,000 |
|
|
|
To 8% Debentures A/c |
|
|
40,00,000 |
|
|
|
To Premium on Redemption of Debenture |
|
|
2,00,000 |
|
|
|
(Debenture issued with the term repayable at 5% premium) |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
|
|
March, 31 |
Statement of Profit and Loss (See Note 1) |
Dr. |
|
10,00,000 |
|
|
|
To Debenture Redemption Reserve A/c |
|
|
10,00,000 |
|
|
|
(Surplus amount is transferred to Debenture Redemption Reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
|
|
|
March 31 |
Statement of Profit and Loss (See Note 1) |
Dr. |
|
10,00,000 |
|
|
|
To Debenture Redemption Reserve A/c |
|
|
10,00,000 |
|
|
|
(Surplus amount is transferred to Debenture Redemption Reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
April 30 |
Debenture Redemption Investment A/c (See Note 2) |
Dr. |
|
6,00,000 |
|
|
|
To Bank A/c |
|
|
6,00,000 |
|
|
|
(Investment is made in specified securities equal to 15% of the value of debentures redeemed) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
8% Debentures A/c |
Dr. |
|
40,00,000 |
|
|
|
Premium on Redemption of Debenture A/c |
Dr. |
|
2,00,000 |
|
|
|
To Debentureholders’ A/c |
|
|
42,00,000 |
|
|
|
(Debenture due for redemption along with premium) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
Bank A/c |
Dr. |
|
6,00,000 |
|
|
|
To Debenture Redemption Investment A/c |
|
|
|
6,00,000 |
|
|
(Investment made in securities, now encashed) |
|
|
|
|
| June 30 | Debentureholders’ A/c | Dr. | 42,00,000 | ||
| To Bank A/c | 42,00,000 | ||||
| (Amount paid to Debentureholders) | |||||
|
|
|
|
|
|
|
|
June 30 |
Debenture Redemption Reserve A/c |
Dr. |
|
20,00,000 |
|
|
|
To General Reserve A/c |
|
|
20,00,000 |
|
|
|
(Debenture Redemption Reserve transferred to General Reserve) |
|
|
|
|
Note:
1. As prescribed by Section 71(4) of the Companies Act, 2013, companies are required to create DRR at 25% of the total value of debentures. However, it purely depends upon a company and its discretion to transfer more amount to DRR than the prescribed amount of 25% in the case of companies for whom it is mandatory to create DRR out of profits. In this case, as explicitly specified about company's discretion, DRR has been created for a total of Rs 20,00,000 which is 50% of the total value of redeemable debentures.
2. 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. Accordingly, entries for DRR and Investment have been passed in the previous accounting year.
3. As explicilty stated in the question, entries for interest on debentures has not been passed.
APPEARS IN
संबंधित प्रश्न
X Ltd. had Rs 10,00,00 9% debentures due to be redeemed out of profits on 1st October 2009 at a premium of 5%. The company had a
Debentures Redemption Reserve of Rs 4,14,000. Pass necessary journal entries at the time of redemption.
Star Ltd. is a manufacturer of chemical fertilisers. Its annual turnover is ₹ 50 crores. The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.
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?
Apollo Ltd.issued 21,000; 8% Debentures of ₹ 100 each on 1st April, 2013 redeemable at a premium of 8% on 30th June, 2019. The company decided to transfer the required amount to Debentures Redemption Reserve in three equal annual instalments starting with 31st March, 2017. Required investment was made in Government Securities on 30th April, 2019. Ignore interest on debentures and also investment.
Pass necessary Journal entries regarding issue, transfer to DRR, investment, and redemption of debentures.
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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The company invested ₹ 3,00,000 in Government securities as required by the Companies Act, 2013.
Pass necessary journal entries for the above transactions.
Hp Ltd. has 1,00,000;8% Debentures of ₹ 50 each due for redemption in five equal annual installments starting from 30th June, 2015. Debentures Redemption Reserve has a balnce of ₹ 5,00,000 on that date . Pass journal entries.
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:
Fill in the blank.
The portion of uncalled capital to be called only in the event of winding up of the company is called ____________.
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 :
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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?
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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, 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.
- Debenture holders’ Account.
- Debenture Redemption Investment Account.
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)
