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Question 15 Chapter 10 of +2-Part-1
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15. (Redemption by drawing of lots) Kalyani Publishers, a listed co., issued 7,000 12% Debentures of RS. 100 each at 5% discount on 1 April 2014, which are redeemable at par. The company has been empowered by its Articles of Association to redeem Rs. 2,00,000 debentures annually by drawing a lot from 1 April 2016. Discount on debentures was written off as per AS-16. Interest is payable on 31 March and 30th September.
Journalise the above transaction for the year 2014-15 to 2016-17
The solution of Question 15 Chapter 10 of +2 Part-1:-
Kalyani Publishers Journal | |||||
Date | Particulars | L.F. | Debit ₹ | Credit ₹ | |
1-4-14 | Bank A/c (7000 X 95) | Dr. | 6,65,000 | ||
To 10% Debenture Application & Allotment A/c | 6,65,000 | ||||
(Being app. Received for 7,000 debentures @ Rs. 95 each) | |||||
Debenture Application & Allotment A/c | Dr. | 6,65,000 | |||
Discount on Debenture A/c | Dr. | 35,000 | |||
To 12 % Debenture A/c | 7,00,000 | ||||
(Being app. Money adjusted ) | |||||
30-9-14 | Interest on debentures A/c | Dr. | 42,000 | ||
To Bank A/c | 42,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-15 | Interest on debentures A/c | Dr. | 42,000 | ||
To Bank A/c | 42,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-15 | Statement of profit & Loss | Dr. | 91,000 | ||
To Interest on debentures A/c | 84,000 | ||||
To Discount on Debenture A/c | 7,000 | ||||
(Being expenses / losses written off) | |||||
30-9-15 | Interest on debentures A/c | Dr. | 42,000 | ||
To Bank A/c | 42,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-16 | Interest on debentures A/c | Dr. | 42,000 | ||
To Bank A/c | 42,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-16 | Statement of profit & Loss | Dr. | 91,000 | ||
To Interest on debentures A/c | 84,000 | ||||
To Discount on Debenture A/c | 7,000 | ||||
(Being expenses / losses written off) | |||||
30-4-16 | Debenture Redemption Investment A/c | Dr. | 30,000 | ||
To Bank A/c | 30,000 | ||||
(Being investment made @ 15% of 2,00,000) | |||||
1-4-16 | Surplus in Statement of Profit & loss | Dr. | 1,75,000 | ||
To Debenture Redemption Reserve A/c | 1,75,000 | ||||
(Being 25% amount of debentures to be redeemed transferred to DRR) | |||||
1-4-16 | 12% Debenture A/c | Dr. | 2,00,000 | ||
To Bank A/c | 2,00,000 | ||||
(Being debentures redeemed) | |||||
30-9-16 | Interest on debentures A/c | Dr. | 30,000 | ||
To Bank A/c | 30,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-17 | Interest on debentures A/c | Dr. | 30,000 | ||
To Bank A/c | 30,000 | ||||
(Being half years interest paid on debentures ) | |||||
31-3-17 | Statement of profit & Loss | Dr. | 67,000 | ||
To Interest on debentures A/c | 60,000 | ||||
To Discount on Debenture A/c | 7,000 | ||||
(Being expenses / losses written off) | |||||
Note: 1. DRI is transferred to General Reserve after the redemption of all debentures.
2. Investment are not realised as they are needed in next year redemption as well.
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It all about Question 15 Chapter 10 of +2-Part-1, If you have any problem please comment below.
Redemption of Debentures – explained with an example
You can also Check out the solved question of other Chapters: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
- Chapter No. 1 – Accounting Not for Profit Organisations
- Chapter No. 2 – Partnership Accounts – I (Introduction)
- Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
- Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
- Chapter No. 8 – Company Accounts (Share Capital)
- Chapter No. 9 – Company Accounts (Issue of Debentures)
- Chapter No. 10 – Company Accounts (Redemption of Debentures)
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution
- Chapter No. 1 – Financial Statements of a Company
- Chapter No. 2 – Financial Statement Analysis
- Chapter No. 3 – Tools of Financial Statement Analysis- Comparative and Common Size
- Chapter No. 4 – Ratio Analysis
- Chapter No. 5 – Cash Flow Statement
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