Page 247 - ISCDEBK-12

Joint Stock Company—Redemption of Debentures 9.21

Debentureholders’ A/c ...Dr. 54,000
To Bank A/c 54,000
(Being the interest on debentures paid)
TDS Payable A/c ...Dr. 6,000
To Bank A/c 6,000
(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. 2,46,500
To Bank A/c 2,46,500
(Being own 2,500, 8% Debentures purchased @ ` 62 each, 1,500,
8% Debentures @ ` 61 each)
8% Debentures A/c ...Dr. 2,00,000
Premium on Redemption of Debentures A/c ...Dr. 40,000
Loss on Cancellation of Own Debentures A/c ...Dr. 6,500
To Own Debentures A/c 2,46,500
(Being 4,000 Own Debentures cancelled resulting in a loss)
Capital Reserve A/c ...Dr. 6,500
To Loss on Cancellation of Own Debentures A/c 6,500
(Being the loss on Cancellation of Own debentures set off from
Capital Reserve)
8% Debentures A/c ...Dr. 50,000
Premium on Redemption of Debentures A/c ...Dr. 10,000
To Debentureholders’ A/c 60,000
(Being amount due to debentureholders)
Debentureholders’ A/c ...Dr. 60,000
To Bank A/c 60,000
(Being payment made to debentureholders)
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. 60,000
To Interest on Debentures A/c 60,000
(Being the interest transferred)
Interest Earned A/c ...Dr. 3,750
To Statement of Profit and Loss 3,750
(Being the interest earned transferred)
2017
March 31 Interest on Debentures A/c ...Dr. 40,000
To Debentureholders’ A/c 36,000
To TDS Payable A/c 4,000
(Being the interest due on 10,000, 8% Debentures @ 8% p.a. for one
year and TDS deducted @ 10%)