Question 6 Chapter 10 of +2-Part-1 – USHA Publication 12 Class Part – 1

Question 6 Chapter 10 of +2-Part-1

6. (Redemption out of Capital/Lumpsum) X Ltd., listed co, on 1st January, 2014, issued 6,000 10% Debentures of Rs. 100 each at par, these debentures were redeemed on 31st March 2017 at par. Pass entries relating to issue and redemption.

The solution of Question 6 Chapter 10 of +2 Part-1: –

(i) At time of issue

X Ltd. Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹
1-1-14	Bank A/c	Dr.		6,00,000
	To Debenture Application & Allotment A/c				6,00,000
	(Being amount received on application)
1-1-14	Debenture Application & Allotment A/c	Dr.		6,00,000
	To 10 % Debenture A/c				6,00,000
	(Being debentures allotted )
30-4-16	Debenture Redemption Investment A/c	Dr.		90,000
	To Bank A/c				90,000
	(Being 15% investment on April 30 in the year of redemption)

(ii) At time of Redemption

X Ltd. Journal
Date	Particulars		L.F.	Debit ₹	Credit ₹
31-3-17	Bank A/c	Dr.		90,000
	To Debenture Redemption Investment A/c				90,000
	(Being the investment encashed)
31-3-17	Surplus in statement of Profit & Loss A/c	Dr.		1,50,000
	To General Reserve A/c				1,50,000
	(Being DRR created out of profit equal to 25% of debentures to be redeemed )
31-3-17	10% Debenture A/c	Dr.		6,00,000
	To Debenture holders A/c				6,00,000
	(Being debentures due for redemption )
31-3-17	Debenture Holder A/c	Dr.		6,00,000
	To Bank A/c				6,00,000
	(Being debentures holders paid )
31-3-17	Debenture Redemption Investment A/c	Dr.		1,50,000
	To General Reserve A/c				1,50,000
	(Being the investment sold)

It all about Question 6 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