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Question 6 Chapter 10 of +2-Part-1
6. (Redemption out of Capital/Lumpsum) X Ltd., listed co, on 1st January, 2014, issued 6,000 10% Debentures of Rs. 100 each at par, these debentures were redeemed on 31st March 2017 at par. Pass entries relating to issue and redemption.
(i) At time of issue
X Ltd. Journal
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
|---|---|---|---|---|---|
| 1-1-14 | Bank A/c | Dr. | 6,00,000 | ||
| To Debenture Application & Allotment A/c | 6,00,000 | ||||
| (Being amount received on application) | |||||
| 1-1-14 | Debenture Application & Allotment A/c | Dr. | 6,00,000 | ||
| To 10 % Debenture A/c | 6,00,000 | ||||
| (Being debentures allotted ) | |||||
| 30-4-16 | Debenture Redemption Investment A/c | Dr. | 90,000 | ||
| To Bank A/c | 90,000 | ||||
| (Being 15% investment on April 30 in the year of redemption) | |||||
(ii) At time of Redemption
X Ltd. Journal
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
|---|---|---|---|---|---|
| 31-3-17 | Bank A/c | Dr. | 90,000 | ||
| To Debenture Redemption Investment A/c | 90,000 | ||||
| (Being the investment encashed) | |||||
| 31-3-17 | Surplus in statement of Profit & Loss A/c | Dr. | 1,50,000 | ||
| To General Reserve A/c | 1,50,000 | ||||
| (Being DRR created out of profit equal to 25% of debentures to be redeemed ) | |||||
| 31-3-17 | 10% Debenture A/c | Dr. | 6,00,000 | ||
| To Debenture holders A/c | 6,00,000 | ||||
| (Being debentures due for redemption ) | |||||
| 31-3-17 | Debenture Holder A/c | Dr. | 6,00,000 | ||
| To Bank A/c | 6,00,000 | ||||
| (Being debentures holders paid ) | |||||
| 31-3-17 | Debenture Redemption Investment A/c | Dr. | 1,50,000 | ||
| To General Reserve A/c | 1,50,000 | ||||
| (Being the investment sold) | |||||
It all about Question 6 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 6 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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