Question 13 Chapter 10 of +2-A
Table of Contents
13. Godrej Ltd. has 20,000; 7% Debentures of 100 each due for redemption on 31st August 2018. There is a balance of 3,50,000 in Debentures Redemption Reserve Account as on 31st March 2016. Investment, as required by the Companies Act, 2013 is made on 1st April 2017 in fixed deposit bearing interest @ 6% p.a. Bank deducted TDS @ 10% on its maturity which is 31st March 2018. Pass Journal entries for the redemption of debentures.
The solution of Question 13 Chapter 10 of +2-A: –
| In the Books of Godrej Ltd |
|||||
| Date | Particulars |
L.F. | Debit | Credit | |
| 2017 | |||||
| Apr. 01 | Debenture Redemption Investment A/c | Dr | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being Investment made in specified securities) | |||||
| 2018 | |||||
| Mar. 31 | Bank A/c 3, 00, 000 +16, 200 | Dr | 3,16,200 | ||
| Tax Payable A/c | Dr | 1,800 | |||
| To Interest on Debenture Redemption Investment A/c | 18,000 | ||||
| To Debenture Redemption Investment A/c | 3,00,000 | ||||
| (Being Investment cashed and interest received) | |||||
| Mar 31 | Statement of Profit and Loss | Dr | 1,50,000 | ||
| To Debenture Redemption Reserve A/c | 1,50,000 | ||||
| (Being DRR created) | |||||
| Aug. 31 | 7% Debentures A/c | Dr | 20,00,000 | ||
| To Debenture holders’ A/c | 20,00,000 | ||||
| (Being Surplus amount is transferred to Debenture Redemption Reserve) | |||||
| Aug. 31 | Debenture holders’ A/c | Dr | 20,00,000 | ||
| To Bank A/c | 20,00,000 | ||||
| (Being Payment made on the redemption of debentures) | |||||
| Aug. 31 | Debenture Redemption Reserve A/c | Dr | 5,00,000 | ||
| To General Reserve A/c | 5,00,000 | ||||
| (Being Transfer of Debenture Redemption Reserve to General Reserve) | |||||
| Amount of DRRRs | 20, 00, 000 × | 25 |
| 100 | ||
| = 5,00,000 | ||
| Less: Amount already exists in DRR | =1,50,000 |
|
| DRR created for redemption | = 3,50,000 |
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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
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