Page 238 - ISCDEBK-12

9.12 Double Entry Book Keeping (Section A)—ISC XII

March 31 Debentureholders’ A/c ...Dr. 5,35,000
To Bank A/c 5,35,000
(Being the payment made to debentureholders)
March 31 Debentures Redemption Reserve A/c ...Dr. 1,25,000
To General Reserve A/c 1,25,000
(Being the amount proportionate to 5,000 debentures redeemed
transferred to General Reserve)
March 31 8% Debentures A/c ...Dr. 2,50,000
Premium on Redemption of Debentures A/c ...Dr. 17,500
To Debentureholders’ A/c 2,67,500
(Being the amount due to debentureholders on redemption
of debentures)
March 31 Debentureholders’ A/c ...Dr. 2,67,500
To Bank A/c 2,67,500
(Being the payment made to debentureholders)
March 31 Debentures Redemption Reserve A/c ...Dr. 62,500
To General Reserve A/c 62,500
(Being the amount proportionate to 2,500 debentures redeemed
transferred to General Reserve)

2019
March 31 Bank A/c ...Dr. 37,500
To Debentures Redemption Investment A/c 37,500
(Being the fixed deposit encashed on 2,500 debentures being reedemed)
March 31 8% Debentures A/c ...Dr. 2,50,000
Premium on Redemption of Debentures A/c ...Dr. 17,500
To Debentureholders’ A/c 2,67,500
(Being the amount due to debentureholders on redemption
of debentures)

March 31 Debentureholders’ A/c ...Dr. 2,67,500
To Bank A/c 2,67,500
(Being the payment made to debentureholders)
March 31 Debentures Redemption Reserve A/c ...Dr. 62,500
To General Reserve A/c 62,500
(Being the Debentures Redemption Reserve closed by transferring
it to General Reserve)

Note: Outstanding amount on debentures = ` 10,00,000

DRR, i.e., 25% of ` 10,00,000 = ` 2,50,000
Four equal annual instalments = 1/4 × ` 2,50,000 = ` 62,500.