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Nardeep, Hardeep and Gagandeep Were Partners in a Firm Sharing Profits in 2:1:3 Ratio. Their Balance Sheet as on 31.3.2015 Was as Follows - CBSE (Arts) Class 12 - Accountancy

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Question

On 1.4.2013 JJJ Ltd had Rs.1,00,00,000, 10% Debentures of Rs.100 each outstanding.

(i) On 1.4.2014 the company purchased in the open market 30,000 of its own debentures for Rs.99 each and cancelled the same immediately.

(ii) On 28.2.2015 the company redeemed at par debentures of Rs.50, 00,000 by draw of a lot.

(iii) On 31.1.2016 the remaining debentures were purchased for immediate cancellation for Rs.19,99,000.

Ignoring interest on debentures and debenture redemption reserve, pass necessary journal entries for the above transactions in the books of the company.

Solution

                                                                                       In the books of JJJ Ltd

                                                                                                  Journal

Date Particulars L.F. Dr. (Rs.) Cr. (Rs.)

2014

Apr. 01

 

 

 

 

 

 

 

 

 

 

 

 

2015

Feb. 28

 

 

 

 

 

 

 

2016

Jan. 31

 

 

 

 

 

 

 

 

 

 

 

 

Own Debentures A/c                                                                                                                           Dr

          To Bank A/c

(Being purchase of 30,000 own debentures @ Rs.99 each)

 

10% Debentures A/c                                                                                                                           Dr

           To Own Debentures A/c

           To Gain (Profit) on cancellation

(Being cancellation of own debentures)

 

Gain (Profit) on Cancellation A/c                                                                                                           Dr

            To Capital Reserve A/c

(Being transfer of gain (Profit) on redemption of debentures to capital reserve)

 

 

10% Debentures A/c                                                                                                                            Dr

            To Debenture holders A/c

(Being 10% 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 20,000 own debentures)

 

10% Debentures A/c                                                                                                                            Dr

               To Own Debentures A/c

               To Gain (Profit) on Cancellation

(Being own debentures purchased and cancelled)

 

Gain (Profit) on Cancellation A/c                                                                                                           Dr

               To Capital Reserve A/c

(Being transfer of Gain (Profit) on redemption of debentures to Capital Reserve)

 

 

29,70,000

 

 

 

30,00,000

 

 

 

 

30,000

 

 

 

 

50,00,000

 

 

 

50,00,000

 

 

 

 

19,99,000

 

 

 

20,00,000

 

 

 

 

1,000

 

 

 

 

29,70,000

 

 

 

29,70,000

30,000

 

 

 

30,000

 

 

 

 

50,00,000

 

 

 

50,00,000

 

 

 

 

19,99,000

 

 

 

19,99,000

1,000

 

 

 

1,000

 

  Is there an error in this question or solution?
Solution Nardeep, Hardeep and Gagandeep Were Partners in a Firm Sharing Profits in 2:1:3 Ratio. Their Balance Sheet as on 31.3.2015 Was as Follows Concept: Redemption of Debentures for Immediate Cancellation - Draw of Lots, Lump Sum and Purchase in the Open Market.
S
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