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Question No 04 Chapter 3 - UNIMAX Class 12 Part 2 - 2021
Punjab & Sindh Bank issued 40,000, 8% debenture of ₹ 100 each at a premium of 5% on sept.30,2018 redeemable on sept. 30,2022 the issue was fully subscribed. Record necessary entries for issue and redemption of debentures.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| Sept.30 | Bank A/c | Dr. | 42,00,000 | ||
| To Debenture application & allotment A/c | 42,00,000 | ||||
| (Being receipt of application money) | |||||
| Sept.30 | Debenture Application & Allotment A/c | Dr. | 42,00,000 | ||
| To Debenture A/c | 40,00,000 | ||||
| To Securities premium reserve A/c | 2,00,000 | ||||
| (Being application money transferred) | |||||
| 2022 Sept.30 | Debenture A/c | Dr. | 40,00,000 | ||
| To Debenture holder A/c | 40,00,000 | ||||
| (Being amount due on redemption) | |||||
| Sept. 30 | Debenture holder A/c | Dr. | 10,00,000 | ||
| To Bank A/c | 10,00,000 | ||||
| (Being payment of amount due to debenture holders) | |||||
Note:
(1) As per Section 71 (4) with rule 18 (7) a banking company is not required to create debenture redemption reserve.
(2) A company which is not required to create DRR is exempted from investing 15%, amount also.
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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