Question 11 Chapter 10 of +2-Part-1
11. (Issue of debentures/Redemption in installments and at premium) On 1 April, 2011 Reebock Ltd; an unlisted co, issued 8,000 10% Debentures of 100 each at par, redeemable at 5% premium in two installment commencing from 30th September, 2015. It was resolved to transfer required amount to Debenture Redemption Reserve in three equal installments commencing from 31 March, 2012 The required investment was made in Govt. Securities at 9% pa. Journalise the transactions from 1 April, 2011 to 30th September, 2015 ignoring interest on debentures, TDS and loss on issue of debentures.
The solution of Question 10 Chapter 10 of +2 Part-1: –
| Journal |
|||||
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
| Apr.1,11 | Bank A/c | Dr. | 8,00,000 | ||
| To 10% Debenture Application A/c | 8,00,000 | ||||
| (Being 8,000 debentures of Rs. 100 each issued) | |||||
| May 31 | 10% Debenture Application A/c | Dr. | 8,00,000 | ||
| Loss on issue of Debenture A/c | Dr. | 40,000 | |||
| To 10 % Debenture A/c | 8,00,000 | ||||
| To Premium on redemption A/c | 40,000 | ||||
| (Being 8,000 debentures of Rs. 100 each issued) | |||||
| Mar.31,12 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,13 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,14 | Statement of Profit & loss | Dr. | 66,667 | ||
| To Debenture Redemption Reserve A/c | 66,667 | ||||
| (Being DRR created on 1/3 of Rs. 2,00,000) | |||||
| Mar.31,15 | Debenture Redemption Investment A/c | Dr. | 1,20,000 | ||
| To Bank A/c | 1,20,000 | ||||
| (Being investment @ 15% of Rs. 8,00,000 made) | |||||
| Sep.30 | 10 % Debenture A/c | Dr. | 4,00,000 | ||
| Premium on Redemption of Debentures A/c | Dr. | 20,000 | |||
| To Bank A/c | 4,20,000 | ||||
| (Being debentures amount due) | |||||
| Debenture holders A/c | Dr. | 4,20,000 | |||
| To Bank A/c | 4,20,000 | ||||
| (Being amount paid to debentures holders ) | |||||
Note: 1. second instalment of debentures will be paid after 30th September , 2015 . Which is not given in the solution because entrees have been asked only up to 30th Sept. 2015.
2. DRI will be realised after redemptions of all debentures .
It all about Question 11 Chapter 10 of +2-Part-1, If you have any problem please comment below.
Redemption of Debentures – explained with an example
End of Solution
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Question 13 Chapter 10 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 2 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 8 – Company Accounts (Share Capital)
Chapter No. 9 – Company Accounts (Issue of Debentures)
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Chapter No. 10 – Company Accounts (Redemption of Debentures)
Chapter No. 11 – Financial Statements of a Company
Chapter No. 12 – Financial Statement Analysis
Chapter No. 13 – Tools of Financial Statement Analysis- Comparative and Common Size
Chapter No. 14 – Accounting Ratios
Chapter No. 15 – Cash Flow Statement
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- Chapter No. 1 – Company Accounts (Share Capital)
- Chapter No. 2 – Issue of Debentures
- Chapter No. 3 – Redemption of Debentures
- Chapter No. 4 – Financial Statements of a Company (Balance Sheet Only)
- Chapter No. 5 -Financial Statement Analysis
- Chapter No. 6 – Tools/Methods of Financial Analysis
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