Question 1

Question 01 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 01 Chapter 10 of +2-A
1. Star Ltd. is a manufacturer of chemical fertilizers. Its annual turnover is Rs 50 crores. The company had issued 5,000, 12% Debentures of Rs 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.
The solution of Question 01 Chapter 10 of +2-A: - 
 
Amount required to be transferred to DRR = 25% of Face value of Debentures= 25% of Rs 25,00,000 = Rs 6,25,000

Question 2

Question 02 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 02 Chapter 10 of +2-A
2. Young India Ltd. had issued the following debentures:(a)1,00,000, 10% fully convertible debentures of  100 each on 1st April 2016 redeemable by conversion after 5 years.(b)20,000, 10% Debentures of  100 each redeemable after 4 years, 25% Debentures in Cash and 75% by conversion.State the amount of DRR required to be created as per the Companies Act,2013.
The solution of Question 02 Chapter 10 of +2-A: - 
 
a. There is no need for the creation of DRR because the

Question 3

Question 03 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 03 Chapter 10 of +2-A
3. Dow Ltd. issued Rs 2,00,000; 8% Debentures of Rs 10 each at a premium of 8% on 30th June, 2016 redeemable on 31st March, 2018. How much amount should be transferred to DebenturesRedemption Reserve before redemption of debentures
The solution of Question 03 Chapter 10 of +2-A: - 
 
Section 714 of the Companies Act, 2013 requires that an amount equal to at least 25% of the value of debentures is to be transferred to the Debenture Redemption Reserve Account. Accor

Question 4

Question 04 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 04 Chapter 10 of +2-A
4. Nirbhai Chemicals Ltd. issued 10,00,000; 6% Debentures of Rs 50 each at a premium of 8% on 30th June 2018 redeemable on 30th June 2019. The issue was fully subscribed. Pass Journal entries for issue and redemption of debentures. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures? Also, state how much amount should be invested in specified securities?
The solution of Question 04 Chapter 10 of +2-A: - 
 
Journal

Question 5

Question 05 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 05 Chapter 10 of +2-A
5. Export-Import Bank of India EXIM Bank issued 20,000, 10% Debentures of 100 each Through public issue and 10,000, 10% Debentures of 100 each through private placement . State the amount of investment to be made by EXIM Bank before redemption of debentures.
The solution of Question 05 Chapter 10 of +2-A: - 
The Companies Act, 2013 exempts Banking Companies to invest in specified securities. Under this act, the Banking companies cannot issue or invest any type of

Question 6

Question 06 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 06 Chapter 10 of +2-A
6. SRC Ltd. has issued on 1st April 2017, 20,000, 12% Debentures of 100 each redeemableby draw of lots as under:During the year ended on 31st March 2018: 15%During the year ended on 31st March 2019: 25%During the year ended on 31st March 2020: 15%During the year ended on 31st March 2021: 25%During the year ended on 31st March 2022: 20%How much minimum investment should be made by SRCC Ltd. as per Companies Act, 2013 before redemption of debentures? When should it

Question 7

Question 07 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 07 Chapter 10 of +2-A
7. IFCI Ltd. An All India Financial Institution issued 10,00,000; 9% Debentures of 50 each on 1st April 2011 redeemable on 1st April 2019. How much amount of Debentures Redemption Reserve is required before the redemption of debentures? Also, pass Journal entries for issue and redemption of debentures.
The solution of Question 07 Chapter 10 of +2-A: - 
 
Journal In the Books of IFCI Ltd.

Date
Particulars
L.F.
Debit
Credit

2011

April 1
Bank A/c
Dr

Question 8

Question 08 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 08 Chapter 10 of +2-A
8. On 31st March, 2003, G Ltd. had 8,00,000;9% Debentures due for redemption. The company had a balance of 1,40,000 in its Debentures Redemption Reserve. Pass necessary journal entries for the redemption of debentures.
The solution of Question 08 Chapter 10 of +2-A: - 
 
Journal In the Books of G Ltd.

Date
Particulars
L.F.
Debit
Credit

2002

Mar. 1
Statement of Profit or Loss
Dr
 
60,000

To Debenture Redemption Reserve A/c (WN)
 
 
 
60,000

Question 9

Question 09 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 09 Chapter 10 of +2-A
9. On 31st March 2018, W Ltd. had the following balances in its books:

Rs

9% Debentures 
6,00,000

Debentures Redemption Reserve
50,000

Surplus, i.e., Balance in Statement of Profit and Loss
3,00,000

On that date, the company decided to transfer 1,00,000 to Debentures Redemption Reserve. It also decided to redeem debentures of 3,00,000 on 30th June 2018.Pass necessary Journal entries in the books of the company.
 
The solution of Question 09 Chapte

Question 10

Question 10 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 10 Chapter 10 of +2-A
10. Mansi Ltd. had 6,000; 10% Debentures of 100 each due for redemption on 31st March 2019. Assuming that the debentures were redeemed out of profits, pass necessary journal entries for the redemption of debentures. There was a credit balance of 6,00,000 in Surplus, i.e., Balance in Statement of Profit and Loss.
 
 
The solution of Question 10 Chapter 10 of +2-A: - 
 
Journal In the Books of Mansi Ltd.

Date
Particulars
L.F.
Debit
Credit

2018

Mar.

Question 11

Question 11 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 11 Chapter 10 of +2-A
11. India Textiles Corporation Ltd. has outstanding 50,00,000; 9% Debentures of 100 each due for redemption on 31st July, 2019. Pass Journal entries for redemption assuming that there is a balance of 3,00,000 in Debentures Redemption Reserve on the date of redemption.
The solution of Question 11 Chapter 10 of +2-A: - 
 
Journal In the Books of India Textiles Corporation Ltd.

Date
Particulars
L.F.
Debit
Credit

2018

Mar. 31
Statement of Profit or Lo

Question 12

Question 12 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 12 Chapter 10 of +2-A
12. Manish Ltd. issued 40,00,000; 8% Debentures of 100 each on 1st April, 2017. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June 2019. The company decided to transfer 10,00,000 out of profits to Debentures Redemption Reserve on 31st March 2018 and 10,00,000 on 31st March 2019.Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest or loss on issue o

Question 13

Question 13 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 13 Chapter 10 of +2-A
13. Godrej Ltd. has 20,000; 7% Debentures of 100 each due for redemption on 31st August 2018. There is a balance of 3,50,000 in Debentures Redemption Reserve Account as on 31st March 2016. Investment, as required by the Companies Act, 2013 is made on 1st April 2017 in fixed deposit bearing interest @ 6% p.a. Bank deducted TDS @ 10% on its maturity which is 31st March 2018. Pass Journal entries for the redemption of debentures.
The solution of Question 13 Chapter 1

Question 14

Question 14 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 14 Chapter 10 of +2-A
14. Apollo Ltd. issued 21,000; 8% Debentures of 100 each on 1st April 2013 redeemable at a premium of 8% on 30th June 2019. The company decided to transfer the required amount to Debentures Redemption Reserve in three equal annual instalment starting with 31st March 2017. The required investment was made in Government Securities on 30th April 2019. Ignore interest on debentures and also an investment. Pass necessary Journal entries regarding the issue, transfer to

Question 15

Question 15 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 15 Chapter 10 of +2-A
15. On 1st April 2016, following were the balances of Blue Bird Ltd.:

10% Debentures redeemableon30thSeptember, 2017
15,00,000

Debentures Redemption Reserve
2,00,000

The company met the requirements of the Companies Act, 2013 regarding Debentures Redemption Reserve and Investment and redeemed the debentures. Pass necessary Journal entries for the above transactions in the books of the company.
 
The solution of Question 15 Chapter 10 of +2-A: - 
 
Books

Question 16

Question 16 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 16 Chapter 10 of +2-A
16. Mahima Ltd. issued 38,00,000, 9% Debentures of 100 each on 1st April 2013. The debentures were redeemable at a premium of 5% on 30th June 2015. The company transferred an amount of 9,50,000 to Debentures Redemption Reserve on 31st March 2015. Investments, as required by law, were made in a fixed deposit of a bank on 1st April 2015. Ignoring interest on fixed deposit, pass necessary journal entries starting from 31st March 2015 regarding the redemption of deben

Question 17

Question 17 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 17 Chapter 10 of +2-A
17. On 1st April 2013 the following balances appeared in the books of Blue and Green Ltd.:

12%Debentures Redeemableon31stAugust, 2015
20,00,000

Debentures Redemption Reserve
2,00,000

The company met the requirements of Companies Act, 2013 regarding Debentures Redemption Reserve and Debentures Redemption Investments and redeemed the debentures. Ignoring interest on investments, pass necessary journal entries for the above transactions in the books of the co

Question 18

Question 18 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 18 Chapter 10 of +2-A
18. Rich sugar Ltd. issued 20 Lakh ,8% Debentures divided into debentures of 100 each on 1st April 2013, redeemable in four equal annual instalments starting from 31st March 2016. The company decided to transfer to Debentures Redemption Reserve 2,50,000 each year on 31st March 2014 and 2015. The company invested 3,00,000 in Government securities as required by the Companies Act, 2013. Pass necessary journal entries for the above transactions. 
 
The solution of Qu

Question 19

Question 19 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 19 Chapter 10 of +2-A
19. Hp Ltd. has 1,00,000;8% Debentures of 50 each due for redemption in five equal annual installments starting from 30th June, 2015. Debentures Redemption Reserve has a balance of 5,00,000 on that date . Pass journal entries.
 
The solution of Question 19 Chapter 10 of +2-A: -

Date
Particulars
L.F.
Debit
Credit

2015

Mar.01
Statement of Profit and Loss
Dr
 
7,50,000

To Debenture Redemption Reserve
 
 
 
7,50,000

(Being Surplus amo

Question 20

Question 20 Chapter 10 of +2-A - T.S. Grewal 12 Class

Sarbjit Singh · Accepted Answer

Question 20 Chapter 10 of +2-A
20. Venus Ltd. had 9,000, 9% Debentures of 100 each due for redemption. These debentures are to be redeemed in 3 equal instalments starting from 31st March 2015 at a premium of 10%. The company had a balance of 25,000 in the Debentures Redemption Reserve. Pass necessary entries for the redemption of debentures assuming that company transfer the balance of DRR to General Reserve after redeeming all the debentures
 
The solution of Question 20 Chapter 10 of +2-A: -

T.S. Grewal 12 Class Book Keeping Part - A - Vol. 2 Solutions Chapter No 10 - company account – Redemption of Debenture

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💡 Double Entry Accounting Principles

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Table of Contents

Question 01 Chapter 10 of +2-A - T.S. Grewal 12 Class

The solution of Question 01 Chapter 10 of +2-A: -

Question 02 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 03 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 04 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 05 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 06 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 07 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 08 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 09 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 10 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 11 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 12 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 13 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 14 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 15 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 16 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 17 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 18 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 19 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 20 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 21 Chapter 10 of +2-A - T.S. Grewal 12 Class

Question 22 Chapter 10 of +2-A - T.S. Grewal 12 Class

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