Question 1

Q.No.1 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionFaith & Belief Ltd., a listed company, had outstanding 5,000, 8% Debentures of ₹ 1,000 each due for redemption on 30th September, 2023. How much amount should it transfer to Debenture Redemption Reserve (DRR) and when?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are exempt from creating it.Answer: Nil.

Question 2

Q.No.2 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionAn unlisted public limited company is a manufacturer of chemical fertilisers having Revenue from Operations of ₹ 50 crore. The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Determine the amount of Debentures Redemption Reserve which it should set aside, i.e., transfer to meet the requirements of law.SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing

Question 3

Q.No.3 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionDow Housing Finance Ltd. issued ₹ 2,00,000; 8% Debentures of ₹ 10 each at a premium of 8% on 30th June, 2020 redeemable on 31st March, 2023. How much amount should be transferred to Debentures Redemption Reserve?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are exempt from creating it.Answer: Nil. Housin

Question 4

Q.No.4 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionCare Products Ltd., a listed company, has outstanding 2,000, 8% Debentures of ₹ 1,000 each redeemable at a premium of 10% on 31st December, 2023. How much amount will it transfer to Debentures Redemption Reserve before the redemption of debentures?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are exempt

Question 5

Q.No.5 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionSagar Housing Finance Ltd., a listed HFC, has outstanding 5,000, 9% Debentures of ₹ 1,000 each redeemable at par on 31st January, 2022. How much amount should it transfer to Debenture Redemption Reserve before the redemption of debentures?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are exempt from crea

Question 6

Q.No.6 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionState Bank of India has 6,000, 7% Debentures of ₹ 1,000 each outstanding for redemption. How much amount should it transfer to Debenture Redemption Reserve?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are exempt from creating it.Answer: Nil. Banking companies (for both public issue and private placement

Question 7

Q.No.7 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionStar Finance Ltd., an unlisted NBFC, issued 2,00,000; 8% Debentures of ₹ 10 each at a premium of 8% on 30th June, 2017 redeemable on 31st March, 2021. How much amount should it transfer to Debentures Redemption Reserve before the redemption of debentures?SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed companies, NBFCs, Housing Finance Companies, banks and other financial institutions are

Question 8

Q.No.8 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionOn 1st July, 2018, Astrex Ltd. (an unlisted construction company) issued 1,000, 8% Debentures of ₹ 100 each, to be redeemed at a premium of 6% on 31st December, 2020. The company transferred ₹ 6,000 to the Debenture Redemption Reserve Account on 31st March, 2019, and the balance on 31st March, 2020. The company met the requirement regarding the purchase of Debenture Redemption Investment. The debentures were redeemed on the due date.You are required to prepare: (a) Debenture Redemption R

Question 9

Q.No.10 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionNirbhai Chemicals Ltd., a listed company, issued ₹ 10,00,000; 6% Debentures of ₹ 50 each at a premium of 8% on 30th June, 2022 redeemable on 30th June, 2023. 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.SolutionNote: The debentures are read as issued at a premium of 8%

Question 10

Q.No.11 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionExport-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.SolutionAnswer: Nil. Banking companies and All-India financial institutions are exempt from creating a Debentures Redemption Reserve and from making a Debenture Redemption Investment, whether the debentures are issued to the public

Question 11

Q.No.12 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionSherry Ltd. (a listed NBFC) has 50,000, 6% Debentures of ₹ 100 each due for redemption on 31st March, 2022. It invested in Debentures Redemption Investments on 1st April, 2021 and realised it at 105% and redeemed the debentures.Determine the sale value of investments.SolutionWorking NotesItemWorkingAmount (₹)Debentures due50,000 × 10050,00,000Debenture Redemption Investment15% of 50,00,0007,50,000Sale value of the investment7,50,000 × 105%7,87,500Answer: The investments realise ₹ 7,87,50

Question 12

Q.No.13 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionGlobal Bank Ltd. has outstanding 50,000, 8% Debentures of ₹ 100 each which are due for redemption on 31st March, 2023.Pass Journal entries for redemption of debentures.SolutionNote: Being a banking company, it is not required to create a DRR or to make an investment in specified securities.JournalDateParticularsL.F.Dr. (&#8377;)Cr. (&#8377;)31.3.20238% Debentures A/c Dr.   To Debentureholders A/c(Being the amount due to the debentureholders)50,00,00050,00,00031.3.2023Deben

Question 13

Q.No.14 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionPass necessary Journal entries in the books of Kotak Finance Ltd., a listed NBFC, for issue and redemption of Debentures in the following cases: (i) 2,500, 8% Debentures of ₹ 100 each at a premium of ₹ 10, repayable at par. (ii) 2,500, 7% Debentures of ₹ 100 each at a premium of 10%, repayable at a premium of ₹ 10.SolutionNote: A listed NBFC creates no DRR; the investment of 15% of the debentures (₹ 37,500) is still required.Case (i)JournalDateParticularsL.F.Dr. (&#8377;)Cr. (&#8377;)Ban

Question 14

Q.No.15 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionMansi Ltd., an unlisted (Non-NBFC/HFC) company, had 6,000; 10% Debentures of ₹ 100 each due for redemption on 31st March, 2022. As per the terms of issue, 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.SolutionNote: Debentures redeemable out of profits require a DRR equal to the whole amount (₹ 6,00,000), created from the surplus; 15

Question 15

Q.No.16 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionSun Chemicals Ltd., a listed public limited company, is a manufacturer of chemical fertilisers having turnover of ₹ 50 crore. The company has issued 1,00,000; 10% Debentures of ₹ 100 each at par. Determine the amount of Debentures Redemption Reserve which shall be set aside to meet the requirement of law before redemption of the debentures.SolutionNote: Unlisted companies (other than NBFCs and HFCs) must create a Debenture Redemption Reserve of 10% of the outstanding debentures; listed c

Question 16

Q.No.17 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionIFCI Ltd. (an other Financial Institution as per Section 2(72) of the Companies Act, 2013) issued 10,00,000; 9% Debentures of ₹ 50 each on 1st April, 2017 redeemable on 1st April, 2023. How much amount should be set aside to Debentures Redemption Reserve before the redemption of debentures? Also, pass Journal entries for issue and redemption of debentures.SolutionNote: No DRR (and no Debenture Redemption Investment) is required for an "other financial institution" under Section 2(72) of

Question 17

Q.No.18 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionOn 31st March, 2022, Geekay Ltd., an unlisted (Non-NBFC or HFC) company, had outstanding ₹ 8,00,000; 9% Debentures due for redemption. The company had a balance of ₹ 20,000 in its Debentures Redemption Reserve.Pass necessary Journal entries for redemption of debentures.SolutionWorking NotesItemWorkingAmount (₹)DRR required10% of 8,00,00080,000Already in DRR20,000To be transferred from the surplus80,000 − 20,00060,000Investment (15%)8,00,000 × 15%1,20,000JournalDateParticularsL.F.Dr. (&#8

Question 18

Q.No.19 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionOn 31st March, 2026, Ekta Ltd., an unlisted company, not being a NBFC or HFC, had the following balances in its books: 9% Debentures ₹ 6,00,000; Debenture Redemption Reserve ₹ 30,000; Surplus, i.e., Balance in Statement of Profit & Loss ₹ 3,00,000. On that date, the company transferred ₹ 30,000 to Debentures Redemption Reserve. It redeemed debentures of ₹ 3,00,000 on 30th June, 2026.Pass necessary Journal entries in the books of the company for the above.SolutionNote: DRR required = 10%

Question 19

Q.No.20 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionIndia Textiles Corporation Ltd., a listed company, has outstanding ₹ 50,00,000; 9% Debentures of ₹ 100 each due for redemption on 31st July, 2022.Pass necessary Journal entries for redemption.SolutionNote: A listed company creates no DRR, but it invests 15% of the debentures (₹ 7,50,000) in specified securities before 30th April of the year of redemption.JournalDateParticularsL.F.Dr. (&#8377;)Cr. (&#8377;)1.4.2022Debenture Redemption Investment A/c Dr.   To Bank A/c(Being

Question 20

Q.No.21 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

Sarbjit Singh · Accepted Answer

QuestionBinaca Ltd., an unlisted (Non-NBFC/HFC) company, issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2019. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2021. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2020 and ₹ 2,00,000 on 31st March, 2021.Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest

T.S. Grewal ISC Class 12 Accountancy Solutions Chapter 9 - Redemption of Debentures

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Q.No.1 | Chapter 9 – Redemption of Debentures | T.S. Grewal ISC Class 12 Solution

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