Question

Arvind Ltd., (an unlisted company) had outstanding 10,000, 9% Debentures of ₹ 100 each due for redemption as follows:

On 31st July, 2022	2,000 Debentures
On 31st July, 2023	3,000 Debentures
On 31st July, 2024	Balance Debentures

Company redeemed the debentures on due dates.

You are required to prepare Debenture Redemption Investment Account.

Answer 1

Dr.	Debenture Redemption Investment Account				Cr.
Date	Particulars	Amount (₹)	Date	Particulars	Amount (₹)
2022			2022
Apr 30	To Bank A/c (15% of ₹ 2,00,000)	30,000	March 31	By Balance c/d	30,000
		30,000			30,000
2023			2023
April 1	To Balance b/d	30,000
April 30	To Bank A/c (15% of ₹ 1,00,000)	15,000	March 31	By Balance c/d	45,000
		45,000			45,000
2024			2024
Apr 1	To Balance b/d	45,000	July 31	By Bank A/c	75,000
April 30	To Bank A/c (15% of ₹ 2,00,000)	30,000
		75,000			75,000

Working Note:

1. Total Debentures = 10,000 of ₹ 100 each = ₹ 10,00,000
2. Redemption Dates: 2,000 (₹ 2,00,000), 3,000 (₹ 3,00,000), 5,000 (₹5,00,000)
3. As per the Companies Act, an Unlisted company must invest 15% of maturing debentures before 30th April each year.

Investments Made:

1. For ₹ 2,00,000 due in July 2022 → 15% = ₹ 30,000 → Invested on 30th April 2022.
2. For ₹ 1,00,000 balance after July 2022 redemption (₹ 3,00,000 − ₹ 2,00,000) → Invested ₹ 15,000 on 30th April 2023.
3. For ₹ 5,00,000 due in July 2024 → 15% = ₹30,000 → Invested on 30th April 2024.
   Total Realisation on 31st July 2024: ₹ 75,000.