Page 246 - ISCDEBK-12

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

Statement of Profit and Loss ...Dr. 1,00,000
To Interest on Debentures A/c 1,00,000
(Being the interest transferred)
April 1 Debentures Redemption Investment A/c ...Dr. 37,500
To Bank A/c 37,500
(Being the investment made in fixed deposit with bank earning
interest @ 10%)
2015
March 31 Interest on Debentures A/c ...Dr. 80,000
To Debentureholders’ A/c 72,000
To TDS Payable A/c 8,000
(Being the interest due on 20,000, 8% Debentures @ 8% p.a.
for one year and TDS deducted @ 10%)
Debentureholders’ A/c ...Dr. 72,000
To Bank A/c 72,000
(Being the interest on debentures paid)
TDS Payable A/c ...Dr. 8,000
To Bank A/c 8,000
(Being the TDS deposited in Government Account)
Interest Accrued But Not Due A/c ...Dr. 3,375
TDS Collected (Receivable) A/c ...Dr. 375
To Interest Earned A/c 3,750
(Being the interest on fixed deposit @ 10% provided, TDS was
deducted by Bank @ 10%)
Own Debentures A/c ...Dr. 2,60,000
To Bank A/c 2,60,000
(Being own 5,000, 8% Debentures purchased at all
average price of ` 52)
8% Debentures A/c ...Dr. 2,50,000
Premium on Redemption of Debentures A/c ...Dr. 50,000
To Own Debentures A/c 2,60,000
To Gain (Profit) on Cancellation of Own Debentures A/c 40,000
(Being 5,000 Own Debentures cancelled resulting in a gain)
Gain (Profit) on Cancellation of Own Debentures A/c ...Dr. 40,000
To Capital Reserve A/c 40,000
(Being the gain (profit) on Cancellation transferred)
Debentures Redemption Reserve A/c ...Dr. 62,500
To General Reserve A/c 62,500
(Being the amount proportionate to debentures redeemed
transferred to General Reserve)
Statement of Profit and Loss ...Dr. 80,000
To Interest on Debentures A/c 80,000
(Being the interest transferred)
Interest Earned A/c ...Dr. 3,750
To Statement of Profit and Loss 3,750
(Being the interest earned transferred)
2016
March 31 Interest on Debentures A/c ...Dr. 60,000
To Debentureholders’ A/c 54,000
To TDS Payable A/c 6,000
(Being the interest due on 15,000 Debentures @ 8% p.a. for one
year and TDS deducted @ 10%)