# Solution - Redemption of Debentures for Immediate Cancellation - Draw of Lots, Lump Sum and Purchase in the Open Market

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ConceptRedemption of Debentures for Immediate Cancellation - Draw of Lots, Lump Sum and Purchase in the Open Market

#### Question

On 1.4.2013 Roshni Ltd. had Rs 50,00,000, 9% debentures of Rs 100 each outstanding.

(i) On 1.4.2014 the company purchased in the open market 20,000 of its own debentures at Rs 98.50 each and cancelled the same immediately.

(ii) On 1.10.2014 the company redeemed at par debentures of Rs  16,00,000 by draw of a lot.

(iii) On 31.3.2015 the remaining debentures were purchased for immediate cancellation for Rs 9,98,000. Ignoring interest on debentures and debenture redemption reserve.

Pass necessary journal entries for the above transactions in the books of Roshni Ltd.

#### Solution

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(i) On 1.4.2014 the company purchased in the open market 6,000 of its own debentures for Rs 98 each and cancelled the same immediately.

(ii) On 28.2.2015 the company redeemed at par debentures of Rs 10, 00,000 by draw of a lot.

(iii) On 1.3.2016 the remaining debentures were purchased for immediate cancellation for Rs 3, 99,000.

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

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(i) On 1-4-2014 the company purchased in the open market 4,000 of its own debentures at Rs 102 each and cancelled the same immediately.

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(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.

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Solution for concept: Redemption of Debentures for Immediate Cancellation - Draw of Lots, Lump Sum and Purchase in the Open Market. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)
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