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Question 7 Chapter 10 of +2-Part-1
7. (Redemption in Lumpsum) Y Ltd., a listed co., redeemed Rs. 50,00,000, 8% Debentures at a premium of 10 % 31st March 2017. Pass necessary Journal entries for the redemption of debentures.
Y Ltd. Journal
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
|---|---|---|---|---|---|
| 30-4-16 | Debenture Redemption Investment A/c | Dr. | 90,000 | ||
| To Bank A/c | 90,000 | ||||
| (Being the 15 % investment on April 30 in year of redemption) | |||||
| 31-3-17 | Bank A/c | Dr. | 90,000 | ||
| To Debenture Redemption Investment | 90,000 | ||||
| (Being investment encashed) | |||||
| 30-4-17 | Surplus in Statement of Profit & loss | Dr. | 90,000 | ||
| To Debenture Redemption Investment A/c | 90,000 | ||||
| (Being profit transferred to DRR equal to 100 % of N.V. of debentures ) | |||||
| 30-4-17 | 8% Debenture A/c | Dr. | 50,00,000 | ||
| Premium on Redemption A/c | Dr. | 5,00,000 | |||
| To Debenture holders A/c | 55,00,000 | ||||
| (Being debentures redeemable at 10% premium ) | |||||
| 30-4-17 | Debenture Holder A/c | Dr. | 55,00,000 | ||
| To Bank A/c | 55,00,000 | ||||
| (Being debentures holders paid off ) | |||||
| 30-4-17 | Debenture Redemption Investment A/c | Dr. | 50,00,000 | ||
| To General Reserve A/c | 50,00,000 | ||||
| (Being DRR transferred ) | |||||
Note: 100% DRR created because redemption is out of profit as mentioned in question
It all about Question 7 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 7 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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