Question 8 Chapter 10 of +2-Part-1
8. (Redemption in Lumpsum/Balance of DRR is given) X Ltd. an unlisted co., had ₹ 8,00,000, 9% Debentures, due to be redeemed on 1st October, 2016 at a premium of 5%, The company had a Debenture Redemption Reserve of ₹ 4,14,000. Pass necessary journal entries at the time of redemption.
The solution of Question 8 Chapter 10 of +2 Part-1: –
| X Ltd. Journal |
|||||
| Date | Particulars |
L.F. | Debit ₹ | Credit ₹ | |
| 30-4-16 | Debenture Redemption Investment A/c | Dr. | 1,20,000 | ||
| To Bank A/c | 1,20,000 | ||||
| (Being the 15 % investment on April 30 in year of redemption) | |||||
| 1-10-16 | Bank A/c | Dr. | 1,20,000 | ||
| To Debenture Redemption Investment | 1,20,000 | ||||
| (Being investment encashed) | |||||
| Surplus in Statement of Profit & loss A/c (8,00,000 – 4,14,000) | Dr. | 3,86,000 | |||
| To Debenture Redemption Investment A/c | 3,86,000 | ||||
| (Being profit transferred to DRR) | |||||
| 9% Debenture A/c | Dr. | 8,00,000 | |||
| Premium on Redemption A/c | Dr. | 40,000 | |||
| To Debenture holders A/c | 8,40,000 | ||||
| (Being debentures redeemable at 10% premium ) | |||||
| Debenture Holder A/c | Dr. | 8,40,000 | |||
| To Bank A/c | 8,40,000 | ||||
| (Being debentures holders paid off ) | |||||
| Debenture Redemption Investment A/c | Dr. | 8,00,000 | |||
| To General Reserve A/c | 8,00,000 | ||||
| (Being DRR transferred ) | |||||
It all about Question 8 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