On 1-4-2013 JN Ltd had 5,000, 10% Debentures of 100 each outstanding.
(i) On 1-4-2014 the company purchased in the open market 2000 of its own debentures for 105 each and cancelled the same immediately.
(ii) On 1-4-2015 the company redeemed at par debentures of 1,00,000 by draw of a lot.
(iii) On 28-2-2016 the remaining debentures were purchased for immediate cancellation for 1,97,000
Solution
In the books of JN Ltd
Journal
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
2014
2015
2016
|
Own Debentures A/c Dr To Bank A/c (Being purchase of 2,000 own debentures @ Rs 105 each) 10% Debentures A/c Dr Loss on Cancellation of own Debentures Dr To Own Debentures A/c (Being cancellation of own debentures) Statement of P&L/ Capital Profits A/c Dr To Loss on Cancellation of own Debentures
9% Debentures A/c Dr To Debenture holders A/c (Being 9% debenture due for redemption) Debenture holders A/c Dr To Bank A/c (Being amount paid to debenture holders)
Own Debentures A/c Dr To Bank A/c (Being purchase of 2,000 own debentures) 10% Debentures A/c Dr To Own Debentures A/c To Gain (Profit) on Cancellation (Being own debentures purchased and cancelled) Gain on Cancellation A/c Dr To Capital Reserve A/c (Being transfer of gain on redemption of debentures to |
2,10,000
2,00,000 10,000
10,000
1,00,000
1,00,000
1,97,000
4,00,000
3,000
|
2,10,000
2,10,000
10,000
1,00,000
1,00,000
1,97,000
1,97,000 3,000
3,000
|
