Page 245 - ISCDEBK-12

Joint Stock Company—Redemption of Debentures 9.19
Solution: JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

2012
July 1 Bank A/c ...Dr. 13,75,000
To Debentures Application and Allotment A/c 13,75,000
(Being the applications received for 25,000, 8% Debentures @ ` 55 each)
Debentures Application and Allotment A/c ...Dr. 13,75,000
Loss on Issue of Debentures A/c ...Dr. 2,50,000
To 8% Debentures A/c 12,50,000
To Securities Premium Reserve A/c 1,25,000
To Premium on Redemption of Debentures A/c 2,50,000
(Being the debentures issued at a premium of 10% redeemable at
20% premium)
2013
March 31 Interest on Debentures A/c ...Dr. 75,000
To Debentureholders’ A/c 67,500
To TDS Payable A/c 7,500
(Being the interest due on debentures @ 8% p.a. for nine months and
TDS deducted @ 10%)
Debentureholders’ A/c ...Dr. 67,500
To Bank A/c 67,500
(Being the interest on debentures paid)
TDS Payable A/c ...Dr. 7,500
To Bank A/c 7,500
(Being the TDS deposited in Government Account)
Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 1,56,250
To Debentures Redemption Reserve A/c 1,56,250
(Being one-half of total DRR required transferred)
Securities Premium Reserve A/c ...Dr. 1,25,000
Statement of Profit and Loss ...Dr. 1,25,000
To Loss on Issue of Debentures A/c 2,50,000
(Being the loss written off)
Statement of Profit and Loss ...Dr. 75,000
To Interest on Debentures A/c 75,000
(Being the interest on debentures transferred)
2014
March 31 Interest on Debentures A/c ...Dr. 1,00,000
To Debentureholders’ A/c 90,000
To TDS Payable A/c 10,000
(Being the interest due on debentures @ 8% p.a. for one year and
TDS deducted @ 10%)
Debentureholders’ A/c ...Dr. 90,000
To Bank A/c 90,000
(Being the interest on debentures paid)
TDS Payable A/c ...Dr. 10,000
To Bank A/c 10,000
(Being the TDS deposited in Government Account)
Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 1,56,250
To Debentures Redemption Reserve A/c 1,56,250
(Being one-half of total DRR required transferred)