Question 09 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 09 Chapter 10 of +2-A

9. On 31st March 2018, W Ltd. had the following balances in its books:

 

	Rs
9% Debentures	6,00,000
Debentures Redemption Reserve	50,000
Surplus, i.e., Balance in Statement of Profit and Loss	3,00,000

On that date, the company decided to transfer 1,00,000 to Debentures Redemption Reserve. It also decided to redeem debentures of 3,00,000 on 30th June 2018.
Pass necessary Journal entries in the books of the company.

 

The solution of Question 09 Chapter 10 of +2-A: - 

 

Journal In the Books of W Ltd.

Date	Particulars		L.F.	Debit	Credit
2018
Mar. 31	Statement of Profit or Loss	Dr		1,00,000
	To Debenture Redemption Reserve A/c				1,00,000
	(Being Surplus amount is transferred to DRR)
April 30	Debenture Redemption Investment A/c *	Dr		45,000
	To Bank A/c				45,000
	(Being Investment is made in specified securities equal to 15%)
June 30	9%Debenture A/c	Dr		3,00,000
	To Debentureholders' A/c				3,00,000
	(Being Debentures due for redemption)
June 30	Bank A/c	Dr		45,000
	To Debenture Redemption Investment A/c				45,000
	(Being Investment made in specified securities is now encashed)
June 30	Debenture holders’ A/c	Dr		3,00,000
	To Bank A/c				3,00,000
	(Being Amount paid to Debentureholders)
June 30	Debenture Redemption Reserve A/c	Dr		75,000
	To General Reserve				75,000
	(Being DRR transferred to General Reserve)

 

* This entry made with 50% of DRR amount, the company has not redeemed full or all debentures .50% of DRR (Rs 1,50,000 x 50%) transfer to General Reserve.

 

Interest on Debentures:-

Date	Particulars		L.F.	Debit	Credit
2002
Mar. 31	Debenture Interest A/c	Dr		33,750
	To Debenture holders’ A/c				33,750
	(Being Interest on 9% Debentures to Debenture holders)
Mar. 31	Debenture holders’ A/c	Dr		33,750
	To Bank A/c				33,750
	(Being Payment of interest to Debenture holders )
Mar. 31	Statement of Profit and Loss	Dr		33,750
	To Debenture Interest A/c				33,750
	(Being Transfer of debenture interest to Statement of Profit and Loss)

 

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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

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication