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Question 11 Chapter 10 of Class 12 Part – 2 – 2024
11. (Redemption in Lumpsum Balance of DRR/ Profit and Loss given/discount on Debenture) The following balances exist in the books of a listed limited company as on1-4-17:
| 12% Debentures | ₹ 4,00,000 |
| Debenture Redemption Reserve | ₹ 20,000 |
| Profit & Loss balance | ₹ 1,50,000 |
| Discount on Debentures | ₹ 15,000 |
| Cash at bank | ₹ 5,60,000 |
| Interest is payable on 31-3-2018 |
It was decided to redeem all debentures on 31-3-2018. TDS rate is 10% for interest.
Pass journal entries.
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The video consists solution of question numbers from 11 to 15 Chapter no. 10 class 12 of Usha publication. To check the direct solution of question no. 11 from the following video by using time stamps of the video.
Y Ltd. Journal
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
|---|---|---|---|---|---|
| 30-4-16 | Debenture Redemption Investment A/c | Dr. | 60,000 | ||
| To Bank A/c | 60,000 | ||||
| (Being the 15 % investment made) | |||||
| 31-3-18 | Interest on Debenture A/c | Dr. | 48,000 | ||
| To Bank A/c | 43,200 | ||||
| To Income Tax Payable A/c | 4,800 | ||||
| (Being annual interest paid after tax @ 10%) | |||||
| 31-3-18 | Surplus in Statement of Profit & loss | Dr. | 80,000 | ||
| To Debenture Redemption Investment A/c | 80,000 | ||||
| (Being DRR created 25% of 4,00,000- 20,000) | |||||
| 31-3-18 | Bank A/c | Dr. | 60,000 | ||
| To Debenture holders A/c | 60,000 | ||||
| (Being investment encashed) | |||||
| 31-3-18 | Statement of Profit & loss | Dr. | 63,000 | ||
| To discount on Debenture A/c | 15,000 | ||||
| To interest on Debentures A/c | 48,000 | ||||
| (Being debentures holders paid off ) | |||||
| 31-3-18 | 12 % Debenture A/c | Dr. | 4,00,000 | ||
| To Bank A/c | 4,00,000 | ||||
| (Being debentures redeemed) | |||||
| 31-3-18 | Debenture Redemption Investment A/c | Dr. | 1,00,000 | ||
| To General Reserve A/c | 1,00,000 | ||||
| (Being DRR transferred ) | |||||
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.
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