Question

Pass necessary Journal Entries for the following transactions in the books of Sudarshan Ltd.

(i) Redeemed 750, 12% Debentures of Rs 75 each by converting into Equity Shares of Rs 100 each. The Equity Shares were issued at a discount of 10%.

(ii) Converted 550, 12% Debentures of Rs 1,000 each into New 13% Debentures of Rs 100 each.

The New Debentures were issued at a premium of 10%.

Answer 1

Books of Sudarshan Ltd.                                  Journal
Date	Particulars		Debit Amount Rs	Credit Amount Rs
	12% Debentures A/c	Dr.	56,250
	To Debentures holders A/c			56,250
	(Debentures due to debentures holders)
	Debenture holders A/c	Dr.	56,250
	Discount on issue of shares A/c	Dr.	6,250
	To Equity share capital A			62,500
	(Equity share of Rs 100 each issued at discount to debentures holders)

`"No. of equity Share Issued" ="Amount Payble" /"(Face Value-Discount Per Share )"` 

=`56250/90` 

=`625` Shares 

(ii)

Books of Sudarshan Ltd.
Date	Particulars		Debit Amount Rs	Credit Amount Rs
	12% Debentures A/c	Dr.	5,50,000
	To Debenture holders A/c			5,50,000
	(Debentures due to debenture holders)
	Debenture holders A/c	Dr.	5,50,000
	To 13% Debentures A/c			5,00,000
	To Securities Premium A/c			50,000
	(13% Debentures of Rs 100 each issued at 10% premium to debenture holders)

`"No.of 13% Debentures Issued"= "Amount Payble"/"(Face Value+Permium) Per debenture"`

=`(5,50,000)/110` 

=`5,000 " Debenture"`