Question 07 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 07 Chapter 10 of +2-A

7. IFCI Ltd. An All India Financial Institution issued 10,00,000; 9% Debentures of 50 each on 1st April 2011 redeemable on 1st April 2019. How much amount of Debentures Redemption Reserve is required before the redemption of debentures? Also, pass Journal entries for issue and redemption of debentures.

The solution of Question 07 Chapter 10 of +2-A: - 

 

Journal In the Books of IFCI Ltd.

Date	Particulars		L.F.	Debit	Credit
2011
April 1	Bank A/c	Dr		5,00,00,000
	To 9% Debentures A/c				5,00,00,000
	(Being Debenture application money received )
April 1	9% Debenture Application A/c	Dr		5,00,00,000
	To 9% Debentures A/c				5,00,00,000
	(Being Debenture application money transferred to Debenture)
2012
Apr.1	9%Debenture A/c	Dr		5,00,00,000
	To Debentureholders' A/c				5,00,00,000
	(Being Debentures due for redemption)
Apr. 1	Debenture holders’ A/c	Dr		5,00,00,000
	To Bank A/c				5,00,00,000
	(Being Amount due for redemption paid to Debentureholders)

 

Entries for Interest on 9% Debentures the question was silence regarding this.

Date	Particulars		L.F.	Debit	Credit
2011
Mar. 31	Debenture Interest A/c	Dr		45,000
	To Debentureholders’ A/c				45,000
	(Being Interest on 9% Debentures to Debentureholders)
Mar. 31	Debenture holders’ A/c	Dr		45,000
	To Bank A/c				45,000
	(Being Payment of interest to Debentureholders )
Mar. 31	Statement of Profit and Loss	Dr		45,000
	To Debenture Interest A/c				45,000
	(Being Transfer of debenture interest to Statement of Profit and Loss)

Note: All India Financial Institutions are exempted from creating DRR because Company Act,2013 is specified securities.

 

 

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Also, Check out the solved question of previous Chapters: -

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

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