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Question 26 Chapter 10 of +2-Part-1
26. (Debenture A/c/Debenture Redemption Fund A/c/Debenture Redemption Fund Investment A/e) The balance sheet of Vansh Ltd., disclosed the following information on 1.1.2017:
| 13% Debentures | 7,00,000 |
| Debenture redemption fund | 5,00,000 |
| Debenture redemption fund investments (interest @ 13% on investments) | 5,00,000 |
The annual contribution to the debenture redemption fund was Rs. 70,000. The debentures were redeemable on December 31, 2018. On 31st December 2018 the investments were sold for Rs. 7,00,000 and the debentures were redeemed.
Prepare Debentures debenture redemption fund and debenture redemption fund investment accounts for the years 2017 and 2018.
Vansh Limited
13% Debentures Account
| Date | Particulars | ₹ | Date | Particulars | ₹ |
|---|---|---|---|---|---|
| 2017 | 2017 | ||||
| Dec. 31 | To Balance c/d | 7,00,000 | Jan. 1 | By Balance B/d | 7,00,000 |
| 7,00,000 | 7,00,000 | ||||
| 2018 | 2018 | ||||
| Dec. 31 | To Debentures Holders A/c | 7,00,000 | Jan. 1 | By Balance B/d | 7,00,000 |
| 7,00,000 | 7,00,000 |
Debentures Redemption Fund Account
| Date | Particulars | ₹ | Date | Particulars | ₹ |
|---|---|---|---|---|---|
| 2017 | 2017 | ||||
| Dec. 31 | To Balance c/d | 6,35,000 | Jan. 1 | By Balance b/d | 5,00,000 |
| Dec. 31 | By Interest on Sinking Fund Investment A/c | 65,000 | |||
| Dec. 31 | By Profit & Loss Appropriation A/c | 70,000 | |||
| 8,52,550 | 8,52,550 | ||||
| 2018 | 2018 | ||||
| Dec. 31 | To General Reserve | 8,52,550 | Jan. 1 | By Balance b/d | 6,35,000 |
| Dec. 31 | By Interest on Sinking Fund Investment A/c | 82,550 | |||
| Dec. 31 | By Profit & Loss Appropriation A/c | 70,000 | |||
| Dec. 31 | By Debentures Sinking Fund Investment A/c | 65,000 | |||
| 8,52,550 | 8,52,550 |
Debentures Redemption Fund Investment Account
| Date | Particulars | ₹ | Date | Particulars | ₹ |
|---|---|---|---|---|---|
| 2017 | 2017 | ||||
| Jan. 1 | To Balance b/d | 5,00,000 | Dec. 31 | By Balance c/d | 6,35,000 |
| Dec. 31 | To Bank A/c | 1,35,000 | |||
| 6,35,000 | 6,35,000 | ||||
| 2018 | 2018 | ||||
| Jan. 1 | To Balance b/d | 6,35,000 | Dec. 31 | By Bank A/c | 7,00,000 |
| Dec. 31 | To Debentures Sinking Fund A/c | 65,000 | |||
| 7,00,000 | 7,00,000 |
It all about Question 26 Chapter 10 of +2-Part-1, If you have any problem please comment below.
https://tutorstips.com/redemption-of-debentures-explained-with-an-example/
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 26 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 USHA Publication +2 Part 1.
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