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ee ris h ATION 7. Ussue and Red M2), ia caraswati Ltd. (an unlisted company) is, . premium of 5% on Ist April, 2015 rede, , ION of Debentures), , sued 10,000 6% Debentures of ¥100 each, , emable on March 3] 2020. The |, all subscribed. It was decided to Invest 15% of the face value of Sebetanes te be, , deemed towards Debenture Redemption Investment on 30th April, 2019, yavestments were encashed and Debentures were redeem ), , acessary entries for issue and redemption of debentures., , , , , , , , , , , , , , a, COLI ’ TI ( VA :, Books of Saraswati Ltd. ‘, - JOURNAL, Base Particddars ee DE. las OF ne, ~ 2015 | | a:, April1 Bank A/c Dr. 10,50,000,, To 6% Debenture Application & |, | Allotment A/c 10.50.000, (Receipt of application money), April 1 6% Debenture Application & Be... l |, Allotment A/c Dr. | 10,50,000., To 6% Debentures A/c | 10,00,000, To Securities Premium Reserve A/c | | 50.000, (Transfer of application money) | |, sapiens ites annem oaemnennennanentansits img aves ‘use |, 2019 |, March 31 Surplus in Statement of Profit & Loss Dr. 1,00,000, | To Debenture Redemption Reserve A/c | | 1,00,000, (Transfer of profits equal to 10% of the | |, nominal value of debentures outstanding), April30 Debenture Redemption Investment Dr. 1,50,000, To Bank A/c | 1,50,000, (Investment made @15% of the face value of !, debentures to be redeemed) “sf |
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ILLUSTRATION 2., (Issue and Redemption of Debentures), , Tulip Ltd. (an unlisted company) issued =4,00,000, 9% Debentures of %100 each, on April 1, 2016 at a premium of 6%, redeemable at a premium of 10% on 31st March,, 2020. Assume that required investment was made in 10% Government Securities on, , April 30 of the financial year in which redemption is due. Debentures were redeemed, , on the due date., Pass journal entries at the time of Issue and Redemption of Debentures., , , , , , , , , , , , SOLUTION :, Books of Tulip Ltd., JOURNAL, , dae Te Patcda LE Dr Ot Oe, , 2016 — |, , April 1 Bank A/c Dr. -4,24,000, To 9% Debenture Application & Allotment A/c — 4,24,000, , (Receipt of application money) |
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‘sgcOUNTING FOR COMPANIES — REDEMPTION OF DE, , ppl, , 2017, March 31, , 2019, March 31, , April 30, , 2020, March 31, , March 3], , March 3], , March 3], , March 3], , 9% Debenture Application & All Dr, , Loss on Issue of Debentures A/c, To 9% Debentures A/c, , To Securities Premium Reserve A/c, To Premium on Redem, , (Transfer of application money), , Securities Premium Reserve A/c, , Dr., Statement of Profit & Loss Dr., , To Loss on Issue of Debentures A/c, (Loss on issue of debentures written off), , Surplus in Statement of Profit & Loss, To Debenture Redemption Reserve A/c, , (Transfer of profits equal to 10% of the nominal, value of debentures outstanding), , Debenture Redemption Investment A/c Dr., , To Bank A/c, , (Investment made @15% of the face value of, debentures to be redeemed), , Bank A/c, To Debenture Redemption Investment A/c, To Interest Received A/c, (Investment bearing 10% p.a. interest encashed), 9% Debentures A/c, , Dr., , To Debentureholder’s A/c, (Amount due on redemption), , Debentureholder’s A/c, To Bank A/c, , (Payment of amount due to debentureholc.vrs), , Debenture Redemption Reserve A/c Dr., , To General Reserve A/c, , (Transfer of Debenture Redemption Reserve A/c, to General Reserve A/c on redemption), , Interest Received A/c, , To Statement of Profit & Loss, (Transfer of interest on investments), , 7 ., Interest 1S Calculated for 1] months,, , otment A/c Dr., Dr., , Dr., , Dr., Premium on Redemption of Debentures A/c Dr., , Dr., , Dr,, , BENTURES, , ption of Debentures A/c, , 24,000, 16,000, , 40,000, , 60,000, , 65,500, , 4,00,000, 40,000, , 4,40,000, , 40,000, , 5,500, , 4,24,000., 40,000., , 97, , 4,00,000, 24,000, 40,000, , 40,000, , 40,000, , 60,000, , 60,000, *5,500, , 4,40,000, 4,40,000, , 40,000, , 3,500
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en, ILLUSTRATION J,, (Redemption of Debentures j, , in case of Banking Company), State Bank of India issued 20,000, 6% Debentures of %50 each at a premium of 8%, , on June 30, 2010 redeemable on June 30, 2020. The issue was fully subscribed. Record, necessary entries for issue and redemption of debentures.
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9.8 ACCOUNTING FOR COMPANIES — REDEMPTION OF DEBENTUREg, eee, , , , SOLUTION : Rooks of State Bank of India, JOURNAL, , aa, , , , , , , , , m “To Securities Premium Reserve A/c, Transfe -of application money), , , , 0 6% Debentures A/c, , , , , , , , | To Debentureholders A/c |, , (Amount due on redemption) le S Stade, >30 Debentureholders A/c aa Dr. ~ 10,00,000, ao To Bank A/c ry Stas WAT, , , , _ (Payment of amount due to aeeatinchislders), , , , Notes : (1) As per Section 71 (4) with rule 18 (7) a Banking Company is not requieta to, create Debenture Redemption Reserve., , (2) A banking company is exempted from investing 15% amount., , , , ILLUSTRATION 4., , On Ist April 2015, Godrej Ltd., which is listed on the stock exchange, issued, 20,000, 8% Debentures of 7100 each at a discount of 4%, redeemable at a premium of, 5% afier 5 years. The issue was fully subscribed. Debentures were redeemed on due, , date. Pass necessary entries for issue and redemption of debentures, assuming that the, loss on issue was written off at the end of first year., , , , SOLUTION : Books of Godrej Ltd., JOURNAL
