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Question no 11 Chapter 3 – UNIMAX Class 12 Part 2 – 2021

Question no- 11 Chapter no -3 Unimax Class-12 Part-II
Question no- 11 Chapter no -3 Unimax Class-12 Part-II

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Question No  11 Chapter 3 – UNIMAX  Class 12 Part 2 – 2021

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Tala Power Ltd. (an unlisted company) issued 40,000, 7% debenture of ₹ 100 each on July 1,2017 redeemable at premium of 5% as under:

On March 31,202016,000 Debentures
On March 31, 202116,000 Debentures
On March 31,20228,000 Debentures

It was decided to transfer Debenture Redemption Reserve ₹ 1,00,000 on March 31,2018; ₹ 2,00,000 on March 31,2019 and balance on March 31,2020. Record necessary journal entries ignoring interest.
(amount transfer to DRR on march 31,2020- ₹ 1,00,000 and the balance of this account transfer to General Reserve ₹ 4,00,000)

The solution of Question 11 Chapter 3 of +2 Part-2: –

Journal
Books of Tata Power Ltd.

Date  Particulars
L.F.DebitCredit
2017     
 Bank A/cDr. 40,00,000 
 To Debenture application & Allotment A/c   40,00,000
 (Being debenture application and allotment money recorded)    
July 1Bank A/cDr. 40,00,000 
 Loss on issue of debenture A/cDr. 2,00,000 
 To Debenture A/c  40,00,000
 To Premium on Redemption A/c  2,00,000
 (Being 40,000 7% debenture issued @ ₹ 100 each redeemable at premium of 5%)    
2018 March 31Statement in Profit & Loss A/cDr. 2,00,000 
 To Loss on issue of Debenture A/c  2,00,000
 (Being loss on issue of debenture written off)    
2018 March 31Surplus statement of Profit & Loss A/cDr. 1,00,000 
 To Debenture redemption reserve A/c  1,00,000
 (Being transfer of Profit & Loss DRR)    
April 30Debenture Redemption Investment A/cDr. 2,40,000 
 To Bank A/c  2,40,000
 (Being 15% of face value is invested)   
2019 March 31Surplus i.e. Balance in P&L A/cDr. 2,00,000 
 To Debenture redemption reserve A/c  2,00,000
 (Being profit transferred to create debentures redemption reserve)   
2020 March 31Surplus i.e. Balance in P&L A/cDr. 1,00,000 
 To Debenture redemption reserve A/c  1,00,000
 (Being profit transferred to create debenture redemption reserve)   
March 31Debentures A/cDr. 16,00,000 
 Premium on redemption of debenture A/cDr. 80,000 
 To Debenture holder A/c   16,80,000
 (Being amount due to debenture holder on redemption of debentures @ ₹ 100 each on 16,000 debenture and premium payable @ 5%p.a.)    
March 31Bank A/cDr. 2,40,000 
 To Debenture redemption investment A/c   2,40,000
 (Being investment encashed)    
March 31Debenture holder A/cDr. 16,80,000 
 To Bank A/c   16,80,000
 (Being payment made to debenture holder on redemption of debenture)    
March 31Debenture redemption investment A/cDr. 1,60,000 
 To General reserve A/c   1,60,000
 (Being transfer of proportionate amount of DRR to GR)    
Apr. 30Debenture Redemption Investment A/cDr. 2,40,000 
 To Bank A/c   2,40,000
 (Being 15% of face value is invested)    
2021 March 31Debenture A/cDr. 16,00,000 
 Premium on Redemption of Debenture A/cDr. 80,000 
 To Debenture holder A/c   16,80,000
 (Being amount due to debenture holder on redemption of debenture @ ₹ 100 each on 16000 debenture and premium payable @ 5%p.a.)    
March 31Bank A/cDr. 2,40,000 
 To Debenture redemption investment A/c   2,40,000
 (Being investment encashed)    
March 31Debenture holder A/cDr.       16,80,000  
 To Bank A/c   16,80,000
 (Being payment made to debenture holder on redemption of debenture)    
 Debenture redemption investment A/cDr. 1,60,000 
 To General reserve A/c   1,60,000
 (Being transfer of proportionate amount of DRR to GR)    
Apr. 30Debenture Redemption Investment A/cDr. 1,20,000 
 To Bank A/c   1,20,000
 (Being 15% of face value is invested)    
2022 March 31Debenture A/cDr. 8,00,000 
 Premium on Redemption of Debenture A/cDr. 40,000 
 To Debenture holder A/c   8,40,000
 (Being amount due to debenture holder on redemption of debenture @ ₹ 100 each on 8000 debenture and premium payable @ 5%p.a.)    
March 31Bank A/cDr. 1,20,000 
 To Debenture redemption investment A/c   1,20,000
 (Being investment encashed)    
 Debenture holder A/cDr. 8,40,000 
 To Bank A/c   8,40,000
 (Being payment made to debenture holder on redemption of debenture)    
March 31Debenture Redemption Reserve A/cDr. 80,000 
 To General reserve A/c   80,000
 (Being transfer of Proportionate amount of DRR to GR)    

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