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Question No 08 Chapter 3 - UNIMAX Class 12 Part 2 - 2021
On 1st April, 2018 Mayur Ltd. (an unlisted company) invited application for issuing 8,000, 5% debenture of ₹ 100 each at a discount of 5%. There debenture were repayable at the end of 3rd year at a premium of 10%. Application for 10,000 debenture were received and the debentures were on pro-rata basis to all the applicants excess money received with application was refunded.
The Directors decided to transfer the minimum amount to debenture redemption reserve on 31-3-21, the company invested the necessary amount in 8% bank fixed deposit as per the provision of the companies Act, 2013. Tax deducted at source by bank on interest @ 10%p.a.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| 2018 | |||||
| April 1 | Bank A/c | Dr. | 9,50,000 | ||
| To Debenture application & allotment A/c | 9,50,000 | ||||
| (Being application & allotment money received, 10,000*₹ 95) | |||||
| April 1 | Debenture Application & Allotment A/c | Dr. | 9,50,000 | ||
| Loss on issue of debenture A/c | Dr. | 1,20,000 | |||
| To Debenture A/c | 8,00,000 | ||||
| To Premium on redemption of debenture A/c | 80,000 | ||||
| To Bank A/c | 1,90,000 | ||||
| (Being allotment of debenture redeemable at 10% premium) | |||||
| 2019 March 31 | Statement of Profit & Loss A/c | Dr. | 1,20,000 | ||
| To Loss on issue of debenture A/c | 1,20,000 | ||||
| (Being loss on issue of debenture written off) | |||||
| 2021 March 31 | Surplus is statement in Profit & Loss A/c | Dr. | 80,000 | ||
| To Debenture redemption reserve A/c | 80,000 | ||||
| (Being transfer of profit equal to 10% of ₹ 8,00,000) | |||||
| 2022 March 31 | Debenture redemption investment A/c | Dr. | 1,20,000 | ||
| To Bank A/c | 1,20,000 | ||||
| (Being investment made @ 15% of ₹ 8,00,000) | |||||
| 2022 March 31 | Bank A/c | Dr. | 1,28,640 | ||
| TDS deposited A/c | Dr. | 960 | |||
| To Debenture Redemption Investment A/c | 1,20,000 | ||||
| To Interest received A/c | 9,600 | ||||
| (Being fixed deposit encashed on redemption) | |||||
| March 31 | Debenture A/c | Dr. | 8,00,000 | ||
| Premium on Redemption Reserve A/c | Dr. | 80,000 | |||
| To Debenture holder A/c | 8,80,000 | ||||
| (Being amount due to debenture holder) | |||||
| March 31 | Debenture holder A/c | Dr. | 8,80,000 | ||
| To Bank A/c | 8,80,000 | ||||
| (Being amount paid on redemption) | |||||
| March 31 | Debenture redemption reserve A/c | Dr. | 80,000 | ||
| To General reserve A/c | 80,000 | ||||
| (Being debenture redemption reserve transferred to general reserve) | |||||
| March 31 | Interest received A/c | Dr. | 9,600 | ||
| To Statement of Profit & Loss A/c | 9,600 | ||||
| (Being transfer of interest on investment) | |||||
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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.
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