Question 14 Chapter 10 of +2-Part-1
14. (Redemption in Installments) An unlisted company issued 12,000 10%. Debentures of Rs. 100 each at Rs. 98 on 1 April 2012. These are redeemable in four annual installments commencing from. 31 March, 2015. DRR was created by the company On 31st March, 2013 Rs. 50,000 and on 31 March, 2014 Rs. 50,000. The balance required as per law was created on 31 March, 2015, Journalise the transactions for the year 2012-13 to 2016-17.
The solution of Question 14 Chapter 10 of +2 Part-1:-
| Journal |
|||||
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
| 1-4-12 | Bank A/c (12000 X 98) | Dr. | 11,76,000 | ||
| To 10% Debenture Application & Allotment A/c | 11,76,000 | ||||
| (Being app. Received for 12,000 debentures @ ₹ 98 each) | |||||
| Debenture Application & Allotment A/c | Dr. | 11,76,000 | |||
| Discount on Debenture A/c | Dr. | 24,000 | |||
| To 10 % Debenture A/c | 12,00,000 | ||||
| (Being app. Money adjusted ) | |||||
| 31-3-13 | Surplus in Statement of Profit & loss | Dr. | 50,000 | ||
| To Debenture Redemption Reserve A/c | 50,000 | ||||
| (Being DRR created to redeem debentures) | |||||
| 31-3-14 | Surplus in Statement of Profit & loss | Dr. | 1,50,000 | ||
| To Debenture Redemption Reserve A/c | 1,50,000 | ||||
| (Being DRR created to redeem debentures) | |||||
| 30-4-14 | Debenture Redemption Investment A/c | Dr. | 45,000 | ||
| To Bank A/c | 45,000 | ||||
| (Being investment made equal to @ 15% of nominal value of debentures to be redeemed on Or before April 30) | |||||
| 31-3-15 | Surplus in Statement of Profit & loss (WN) | Dr. | 1,00,000 | ||
| To Debenture Redemption Reserve A/c | 1,00,000 | ||||
| (Being DRR created to 25% of debentures to be redeemed) | |||||
| 31-3-15 | 10 % Debenture A/c | Dr. | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being ¼ debentures redeemed) | |||||
| 31-3-16 | 10 % Debenture A/c | Dr. | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being ¼ debentures redeemed) | |||||
| 31-3-17 | 10 % Debenture A/c | Dr. | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being ¼ debentures redeemed ) | |||||
Working Note:
| 25% of 10,00,000 | 3,00,000 |
| DRR already created (50,000+1,50,000) | 2,00,000 |
| Remaining DRR Reg. | 1,00,000 |
Note: Discount on debentures will be written off in the ratio of outstanding debentures . For which following entry will be passed each year from 2012-2017
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
| Statement of profit & loss | Dr. | ||||
| To Discount on Debenture A/c | |||||
Note: 2016-17 i.e, last years entries have not been yet asked in the question . Hence debentures worth Rs. 3,00,000 have not been shown as redeemed . Also no transfer is made of DRR to General Reserve because that is done by only after complete redemption. Also investment will be realised in the last year
It all about Question 14 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 11 Chapter 10 of +2-Part-1 – USHA Publication 12 Class Part – 1
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Chapter-Wise Solution of Usha Publication Accountancy – Part 2 Class 12 – Session 2024-25 as per the PSEB curriculum
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Chapter No. 8 – Company Accounts (Share Capital)
Chapter No. 9 – Company Accounts (Issue of Debentures)
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
- Chapter No. 7 – Ratio Analysis
- Chapter No. 8 – Cash Flow Statement
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