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Question
X Ltd. had outstanding 20,000 12% debentures of Rs. 100 each redeemable on June 30, 2019. Record necessary journal entries at the time of redemption.
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Solution
| Journey Entries | ||||
| Date | Particulars | LF | Dr. (Rs.) | Cr. (Rs.) |
| 2019 | ||||
| June 30 | 12% Debenture A/c ...Dr. | 20,00,000 | ||
| To Debenture holders A/c | 20,00,000 | |||
| (Being the amount due on redemption of 20,000, 12% debentures of Rs. 100 each) | ||||
| June 30 | Debenture holders A/c ...Dr. | 20,00,000 | ||
| To Bank A/c | 20,00,000 | |||
| (Being the payment made to debenture holders for 20,000, 12% debentures of Rs. 100 each) | ||||
Calculate the amount due on redemption
Outstanding debentures = 20,000
Redemption price = Rs. 100 per debenture
Total Amount due on redemption = Outstanding Debentures × Redemption price
= 20,000 × Rs. 100
= Rs. 20,00,000
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