Question No 05 Chapter 3 – UNIMAX Class 12 Part 2 – 2021
Table of Contents
Nitu Ltd. (an unlisted company) has 20,000, 7%, debentures of ₹ 100 each due for redemption on 31st March 2022. Debenture Redemption Reserve has a balance of ₹ 1,80,000 on 31st March 2021. It was decided to invest the required amount towards Debenture Redemption Investment. Investment were realized at 110% less. 8% brokerage and debenture were redeemed. Record the necessary entries for the redemption of debenture.
The solution of Question 05 Chapter 3 of +2 Part-2: –
Journal
Books of Nitu Ltd.
| Date | Particulars |
L.F. | Debit | Credit | |
| 2021 March 31 | Surplus is statement in Profit & Loss A/c | Dr. | 20,000 | ||
| To Debenture redemption reserve A/c | 20,000 | ||||
| (Being transfer of profit as per SBEI guidelines) | |||||
| April 30 | Debenture redemption investment A/c | Dr. | 3,00,000 | ||
| To Bank A/c | 3,00,000 | ||||
| (Being investment made @ 15% of the face value of debenture to be redeemed) | |||||
| 2022 March 31 | Bank A/c | Dr. | 3,27,360 | ||
| To Debenture redemption investment A/c | 3,00,000 | ||||
| To Profit & Loss of Investment A/c | 27,360 | ||||
| (Being investment encashed at 105% less brokerage 0.4%) | |||||
| March 31 | Profit on sale of Investment A/c | Dr. | 27,360 | ||
| To Statement of Profit & Loss A/c | 27,360 | ||||
| (Being transfer of profit on sale of investment) | |||||
| March 31 | Debenture A/c | Dr. | 20,00,000 | ||
| To Debenture holder A/c | 20,00,000 | ||||
| (Being amount due on redemption) | |||||
| March 31 | Debenture holder A/c | Dr. | 20,00,000 | ||
| To Bank A/c | 20,00,000 | ||||
| (Being payment of amount due to debenture holders) | |||||
| March 31 | Debenture redemption reserve A/c | Dr. | 2,00,000 | ||
| To General reserve A/c | 2,00,000 | ||||
| (Being transfer of Debenture Redemption Reserve A/c to General Reserve A/c on redemption) | |||||
Working Note :
| (1)Amount realised from sale of investments : | ₹ | |
| 3,00,000 x 110/100 | = | 3,30,00 |
| Less : Brokerage 3,30,000 x 18/100 | = | 2,640 |
| 3,27,360 | ||
| (2) Total Amount Required for transfer to | ₹ | |
| Debenture Redemption Reserve =10 % of 20,00,000 | = | 2,00,000 |
| Less : Existing Balance | = | 1,80,000 |
| Amount now Required to be transferred to Debenture | ||
| Redemption Reserve | 20,000 |
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Share Capital: Meaning, Types, and Classes
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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