Question 09 Chapter 10 of +2-A
Table of Contents
9. On 31st March 2018, W Ltd. had the following balances in its books:
| Rs | |
| 9% Debentures | 6,00,000 |
| Debentures Redemption Reserve | 50,000 |
| Surplus, i.e., Balance in Statement of Profit and Loss | 3,00,000 |
On that date, the company decided to transfer 1,00,000 to Debentures Redemption Reserve. It also decided to redeem debentures of 3,00,000 on 30th June 2018.
Pass necessary Journal entries in the books of the company.
The solution of Question 09 Chapter 10 of +2-A: –
| Journal In the Books of W Ltd. |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 2018 | |||||
| Mar. 31 | Statement of Profit or Loss | Dr | 1,00,000 | ||
| To Debenture Redemption Reserve A/c | 1,00,000 | ||||
| (Being Surplus amount is transferred to DRR) | |||||
| April 30 | Debenture Redemption Investment A/c * | Dr | 45,000 | ||
| To Bank A/c | 45,000 | ||||
| (Being Investment is made in specified securities equal to 15%) | |||||
| June 30 | 9%Debenture A/c | Dr | 3,00,000 | ||
| To Debentureholders’ A/c | 3,00,000 | ||||
| (Being Debentures due for redemption) | |||||
| June 30 | Bank A/c | Dr | 45,000 | ||
| To Debenture Redemption Investment A/c | 45,000 | ||||
| (Being Investment made in specified securities is now encashed) | |||||
| June 30 | Debenture holders’ A/c | Dr | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being Amount paid to Debentureholders) | |||||
| June 30 | Debenture Redemption Reserve A/c | Dr | 75,000 | ||
| To General Reserve | 75,000 | ||||
| (Being DRR transferred to General Reserve) | |||||
* This entry made with 50% of DRR amount, the company has not redeemed full or all debentures .50% of DRR (Rs 1,50,000 x 50%) transfer to General Reserve.
Interest on Debentures:-
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| Date | Particulars |
L.F. | Debit | Credit | |
| 2002 | |||||
| Mar. 31 | Debenture Interest A/c | Dr | 33,750 | ||
| To Debenture holders’ A/c | 33,750 | ||||
| (Being Interest on 9% Debentures to Debenture holders) | |||||
| Mar. 31 | Debenture holders’ A/c | Dr | 33,750 | ||
| To Bank A/c | 33,750 | ||||
| (Being Payment of interest to Debenture holders ) | |||||
| Mar. 31 | Statement of Profit and Loss | Dr | 33,750 | ||
| To Debenture Interest A/c | 33,750 | ||||
| (Being Transfer of debenture interest to Statement of Profit and Loss) | |||||
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Also, Check out the solved question of previous Chapters: –
T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)
- Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
- Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
- Chapter No. 3 – Goodwill: Nature and Valuation
- Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
- Chapter No. 5 – Admission of a Partner
- Chapter No. 6 – Retirement/Death of a Partner
- Chapter No. 7 – Dissolution of a Partnership Firm
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
- Chapter No. 4 – Accounting Ratios
- Chapter No. 5 – Cash Flow Statement
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication
