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Question 22 Chapter 10 of +2-Part-1
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22. (Ledger Accounts) The Debenture Redemption Fund of Export Industries Ltd stood at 18,000, represented by Rs. 20,000 (nominal) investments. The debentures stood in the books at Ts. 50,000 and the Company sold Rs. 12,000 (nominal) investments at 84 per cent for the purpose of redeeming 10.000 debentures at a premium of 1%.
You are required to show the Ledger accounts to record these transactions.
The solution of Question 22 Chapter 10 of +2 Part-1:-
Debentures Redemption Account
Particulars | ₹ | Particulars | ₹ |
To Premium on Red. Of deb. A/c | 100 | By Balance b/d | 16,000 |
To General Reserve A/c | 10,000 | By Deb. Red. Fund Investment A/c | 480 |
To Balance c/d | 6,380 | ||
16,480 | 16,480 |
Debentures Redemption Fund Investment Account
Particulars | ₹ | Particulars | ₹ |
To Balance b/d | 16,000 | By Bank A/c | 10,080 |
To Debenture Red. Fund A/c | 480 | By Balance c/d | 6,400 |
16,480 | 16,480 |
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Debentures Account
Particulars | ₹ | Particulars | ₹ |
To Bank A/c | 10,000 | By Balance b/d | 50,000 |
To Balance c/d | 40,000 | ||
50,000 | 50,000 |
Premium on Redemption of Debentures Account
Particulars | ₹ | Particulars | ₹ |
To Bank A/c | 100 | By Deb. Red. Fund A/c | 100 |
100 | 100 |
Bank Account
Particulars | ₹ | Particulars | ₹ |
To Balance c/d | 100 | By Debentures A/c | 10,000 |
To Deb. Red. Fund Investment A/c | 10,800 | By Premium on Red. of Deb. A/c | 100 |
Working Note :-
Calculation of Profit on sale of investment | ₹ | |
Investments having nominal value 20,000 purchased for | 16,000 | |
Investments having nominal value 1 purchased for | 16,000 | |
20,000 | ||
16,000 | x 12,000 | |
20,000 | ||
9,600 | ||
Sale of investments nominal value 12,000 @ 84% | 10,800 | |
Less: cost of purchase | 9,600 | |
Profit | 480 |
It all about Question 22 Chapter 10 of +2-Part-1, If you have any problem please comment below.
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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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