Question 1

Question 1 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 1 Chapter 10 of +2-Part-1
1. (Amount of DRR/Journal) Punjab National Bank has Outstanding Balance of 3,000 9% Debentures of Rs. 100 each on 31st March, 2015. These are redeemable on 20th August, 2016. How much DRR will be created? Pass entries in Journal for redemption.
The solution of Question 1 Chapter 10 of +2 Part-1: -
https://youtu.be/KFtAd2eoM-g?si=oPGMDuBO9tmQXZA5
Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

9 % Debenture Application A/c
Dr.
 
3,00,000

To Debent

Question 2

Question 2 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 2 Chapter 10 of +2-Part-1
2. (Amount of DRR/Journal) ICICI issued 5,000, 10%. Debentures of Rs. 100 each on 1st April, 2019, How much amount of DRR is required before the redemption Record redemption entries in Journal.
The solution of Question 2 Chapter 10 of +2 Part-1: -
https://youtu.be/KFtAd2eoM-g?si=oPGMDuBO9tmQXZA5
Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

10 % Debenture Application A/c
Dr.
 
5,00,000

To Debenture holders A/c
 
 
 
5,00,000

(Being debentur

Question 3

Question 3 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 3 Chapter 10 of +2-Part-1
3. (Journal) UTI has Rs. 10,00,000 95. Debentures of RS. 100 each due for redemption . Pass Journal entries.
The solution of Question 3 Chapter 10 of +2 Part-1: -
https://youtu.be/KFtAd2eoM-g?si=oPGMDuBO9tmQXZA5
Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

9 % Debenture Application A/c
Dr.
 
10,00,000

To Debenture holders A/c
 
 
 
10,00,000

(Being amount due to debentures holders)

Debenture Holder A/c
Dr.
 
10,00,0

Question 4

Question 4 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 4 Chapter 10 of +2-Part-1
4. (Journal) On 31 March 2017, an unlisted company has Rs. 15,00,000 10% Debentures outstanding. These are to be redeemed on 30th June, 2018. Ignore interest and tax. Pass Journal entries.
The solution of Question 4 Chapter 10 of +2 Part-1: -
https://youtu.be/KFtAd2eoM-g?si=oPGMDuBO9tmQXZA5
Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

2018 Apr. 30
Debenture Redemption Investment A/c
Dr.
 
2,25,000

To Bank A/c
 
 
 
2,25,000

(Being the invest

Question 5

Question 5 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 5 Chapter 10 of +2-Part-1
5. (Redemption in Lumpsum) An unlisted company has to redeem Rs. 6,00,000 10% redeemable debentures on 31 May, 2016. Journalise the redemption entries assuming all legal requirements are met by the company.
The solution of Question 5 Chapter 10 of +2 Part-1: -
https://youtu.be/KFtAd2eoM-g?si=oPGMDuBO9tmQXZA5
Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

2018 May 31
10% Debenture A/c
Dr.
 
6,00,000

To Debenture holders A/c
 
 
 
6,00,000

(Bein

Question 6

Question 6 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 6 Chapter 10 of +2-Part-1
6. (Redemption out of Capital/Lumpsum) X Ltd., listed co, on 1st January, 2014, issued 6,000 10% Debentures of Rs. 100 each at par, these debentures were redeemed on 31st March 2017 at par. Pass entries relating to issue and redemption.
The solution of Question 6 Chapter 10 of +2 Part-1: -
https://youtu.be/KMl4Dagd3NU?si=-VBVNnEq_ev66d0g
(i) At time of issue
X Ltd. Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

1-1-14
 Bank A/c
Dr.
 
6,00,000

To D

Question 7

Question 7 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 7 Chapter 10 of +2-Part-1
7. (Redemption in Lumpsum) Y Ltd., a listed co., redeemed Rs. 50,00,000, 8% Debentures at a premium of 10 % 31st March 2017. Pass necessary Journal entries for the redemption of debentures.
The solution of Question 7 Chapter 10 of +2 Part-1: -
https://youtu.be/KMl4Dagd3NU?si=-VBVNnEq_ev66d0g
Y Ltd. Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

30-4-16
Debenture Redemption Investment A/c
Dr.
 
90,000

To Bank A/c
 
 
 
90,000

(Being the 15 % in

Question 8

Question 8 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

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: -
https://youtu.be/KMl4Dagd3NU?si=-VBVNnEq_ev66d0g
X Ltd. Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

30-4-16
Debent

Question 9

Question 9 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 9 Chapter 10 of +2-Part-1
9. (Redemption in Lumpsum Balance of DRR/ Profit and Loss given/discount on Debenture) The following balances exist in the books of a listed limited company as on1-4-17:

12% Debentures
₹ 4,00,000

Debenture Redemption Reserve
₹ 20,000

Profit & Loss balance
₹ 1,50,000

Discount on Debentures
₹ 15,000

Cash at bank
₹ 5,60,000

Interest is payable on 31-3-2018

It was decided to redeem all debentures on 31-3-2018. TDS rate is 10% for interest. Pa

Question 10

Question 10 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 10 Chapter 10 of +2-Part-1
10. (Partial redemption/Premium on redemption) On 31 May 2017, a company redeemed its 1200 9% Debentures of Rs, 100 each at 5% premium out of the total 6,000 debentures. Debenture Redemption Reserve stood at Rs. 1,10,000. Premium on redemption was existing Company Accounts (Redemption of Debentures) Rs. 30,000. You are required to pass journal entries
The solution of Question 10 Chapter 10 of +2 Part-1: -
https://youtu.be/KMl4Dagd3NU?si=-VBVNnEq_ev66d0g
Y Ltd

Question 11

Question 11 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 11 Chapter 10 of +2-Part-1
11. (Issue of debentures/Redemption in installments and at premium) On 1 April, 2011 Reebock Ltd; an unlisted co, issued 8,000 10% Debentures of 100 each at par, redeemable at 5% premium in two installment commencing from 30th September, 2015. It was resolved to transfer required amount to Debenture Redemption Reserve in three equal installments commencing from 31 March, 2012 The required investment was made in Govt. Securities at 9% pa. Journalise the transa

Question 12

Question 12 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 12 Chapter 10 of +2-Part-1
12. (Different Cases of Redemption) Pass journal entries in the following cases:Rs. 4,00,000 10% debentures of Rs. 100 each redeemed at par. (b) RS. 1,00,000 12% debentures of Rs. 100 each redeemed at Rs. 96.(c) Rs. 2,00.000 12 % Debentures of Rs. 100 each redeemable at premium of 10% are cancelled by purchase in open market at RS. 102. Note: In all the above cases DRR & DRI has already been created.
The solution of Question 12 Chapter 10 of +2 Part-1:-
h

Question 13

Question 13 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 13 Chapter 10 of +2-Part-1
13. (Redemption by Drawings of lots) On 31.3.2019, X Ltd, a listed co., had a balance of Rs. 6,00,000, 8% Debentures. Out of these 25% debentures were redeemed by draw of lots at premium of 25%.
The solution of Question 13 Chapter 10 of +2 Part-1:-
https://youtu.be/ujEG7UsDF-g?si=piPwb9WGoZN00Srk
X Ltd. Journal

Date  
Particulars
L.F.
Debit ₹
Credit ₹

30-4-18
Debenture Redemption Investment A/c(1,50,000 X 15/100)
Dr.
 
22,500

To Bank A/c
 
 
 
22,5

Question 14

Question 14 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 14 Chapter 10 of +2-Part-1
 14. (Redemption in Installments) An unlisted company issued 12,000 10%. Debentures of Rs. 100 each at Rs. 98 on 1 April 2012. These are redeemable in four annual installments commencing from. 31 March, 2015. DRR was created by the company On 31st March, 2013 Rs. 50,000 and on 31 March, 2014 Rs. 50,000. The balance required as per law was created on 31 March, 2015, Journalise the transactions for the year 2012-13 to 2016-17.
The solution of Question 14 Chapte

Question 15

Question 15 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 15 Chapter 10 of +2-Part-1
15. (Redemption by drawing of lots) Kalyani Publishers, a listed co., issued 7,000 12% Debentures of RS. 100 each at 5% discount on 1 April 2014, which are redeemable at par. The company has been empowered by its Articles of Association to redeem Rs. 2,00,000 debentures annually by drawing a lot from 1 April 2016. Discount on debentures was written off as per AS-16. Interest is payable on 31 March and 30th September. Journalise the above transaction for the y

Question 16

Question 16 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 16 Chapter 10 of +2-Part-1
16. (Redeemable by Drawing a lots) A listed company has on 1-4-16 Rs. 4,00,000 10% Debentures of 100 each. These are redeemable by drawing of lots at 5% premium. At the time of issue of these debenture, premium was not credited.On 30-6-16 appeared company redeemed 700 debentures at premium. The following balances.

Securities Premium
₹ 6,000

Reserve Profit & Loss
₹ 2,50,000

Bank Balance
₹ 60,000

Bank loan to the extent necessary for redemption wa

Question 17

Question 17 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 17 Chapter 10 of +2-Part-1
17. (Journal/Ledger) A Company issued 5,000, 9% debentures, of 10 each on 1st Jan., 2016, repayable after 3 years. It was decided to set up a sinking fund for the purpose of redeeming these debentures. Sinking Fund table revealed that an amount of Rs. 0.3,17,208 set aside every year and invested in 5% securities would yield Rs. 1 after three years. On 31st December, 2018 the debentures were redeemed.Give Journal entries and prepare necessary accounts.
The sol

Question 18

Question 18 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 18 Chapter 10 of +2-Part-1
18. (Amount of Profits to be Charged) West Ltd. issued 2,000, 10% debentures of Rs. 100 each at par, repayable after 5 years. It was decided to establish a Sinking Fund for their redemption and to invest it in the securities yielding 5% interest p.a. Reference to Sinking Fund Table shows that to get Re. 1 at the end of 5 years Rs. 0.180975 is to be invested. Calculate the amount of profits to be charged each year.
The solution of Question 18 Chapter 10 of +2

Question 19

Question 19 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 19 Chapter 10 of +2-Part-1
19. (Journal/Ledger/Compound Interest) On 1st January, 2014 debentures worth Rs. 75,000were issued at par, repayable at par at the end of five years. In terms of the Trust Deed, a Sinking Fund was to be created for the purpose of redemption.
All investments, including reinvestment of interest received, were made at the end of each year and earned 5% p.a.Give journal entries and prepare ledger accounts for five years when sinking fund table shows that Rs. 2.71

Question 20

Question 20 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Sarbjit Singh · Accepted Answer

Question 20 Chapter 10 of +2-Part-1
20. (Debenture Account/Sinking Fund A/c/Sinking Fund Investment A/e) Shakti Chemical Ltd. issues 2,000, 9% debentures of Rs. 100 each on 1st January, 2015 repayable at the end of three years at a premium of 5 percent. It is decided to set up a sinking fund for the purpose of redemption. The investments are expected to earn 5 percent interest per annum.The sinking fund table shows that in order to get Rs. 1 after three years at 5 percent per annum, an amount o

Particulars		Debit ₹	Credit ₹
9 % Debenture Application A/c	Dr.	3,00,000
To Debenture holders A/c			3,00,000
(Being amount due to debentures holders)

Debenture Holder A/c	Dr.	3,00,000
To Bank A/c			3,00,000
(Being payment made)

USHA Publication +2 Part 1 Solutions Chapter No. 10 - Company Accounts – Redemption of Debenture - Usha Publication

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Topics & Questions Solved:

Question 1 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

The solution of Question 1 Chapter 10 of +2 Part-1: -

Question 2 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 3 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 4 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 5 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 6 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 7 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 8 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 9 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 10 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 11 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 12 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 13 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 14 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 15 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 16 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 17 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 18 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 19 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 20 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 21 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 22 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 23 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 24 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 25 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 26 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 27 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 28 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 29 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 30 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 32 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 33 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 34 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 35 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

Question 36 Chapter 10 of +2-Part-1 - USHA Publication 12 Class Part - 1

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