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Question 11 Chapter 10 of +2-Part-1
11. (Issue of debentures/Redemption in installments and at premium) On 1 April, 2011 Reebock Ltd; an unlisted co, issued 8,000 10% Debentures of 100 each at par, redeemable at 5% premium in two installment commencing from 30th September, 2015. It was resolved to transfer required amount to Debenture Redemption Reserve in three equal installments commencing from 31 March, 2012 The required investment was made in Govt. Securities at 9% pa. Journalise the transactions from 1 April, 2011 to 30th September, 2015 ignoring interest on debentures, TDS and loss on issue of debentures.
Journal
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
|---|---|---|---|---|---|
| Apr.1,11 | Bank A/c | Dr. | 8,00,000 | ||
| To 10% Debenture Application A/c | 8,00,000 | ||||
| (Being 8,000 debentures of Rs. 100 each issued) | |||||
| May 31 | 10% Debenture Application A/c | Dr. | 8,00,000 | ||
| Loss on issue of Debenture A/c | Dr. | 40,000 | |||
| To 10 % Debenture A/c | 8,00,000 | ||||
| To Premium on redemption A/c | 40,000 | ||||
| (Being 8,000 debentures of Rs. 100 each issued) | |||||
| Mar.31,12 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,13 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,14 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,15 | Debenture Redemption Investment A/c | Dr. | 1,20,000 | ||
| To Bank A/c | 1,20,000 | ||||
| (Being investment @ 15% of Rs. 8,00,000 made) | |||||
| Sep.30 | 10 % Debenture A/c | Dr. | 4,00,000 | ||
| Premium on Redemption of Debentures A/c | Dr. | 20,000 | |||
| To Bank A/c | 4,20,000 | ||||
| (Being debentures amount due) | |||||
| Debenture holders A/c | Dr. | 4,20,000 | |||
| To Bank A/c | 4,20,000 | ||||
| (Being amount paid to debentures holders ) | |||||
Note: 1. second instalment of debentures will be paid after 30th September , 2015 . Which is not given in the solution because entrees have been asked only up to 30th Sept. 2015.
2. DRI will be realised after redemptions of all debentures .
It all about Question 11 Chapter 10 of +2-Part-1, If you have any problem please comment below.
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Question 11 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter No. 10 - Company Accounts – Redemption of Debenture - Usha Publication.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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