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M.36 Management Accounting (Section B)—ISC XII

6. JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 Bank A/c ...Dr. 42,00,000
To Debentures Application and Allotment A/c 42,00,000
(Being the receipt of application money for 40,000 debentures
@ ` 105 per debentures)

April 1 Debentures Application and Allotment A/c ...Dr. 42,00,000
Loss on Issue of Debentures A/c ...Dr. 4,00,000
To 10% Debentures A/c 40,00,000
To Premium on Redemption of Debentures A/c 4,00,000
To Securities Premium Reserve A/c 2,00,000
(Being the issue of 40,000; 10% Debentures at a premium of 5% and
redeemable at a premium of 10%)
April 1 Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 10,00,000
To Debentures Redemption Reserve A/c 10,00,000
(Being the creation of DRR as per Rule 18(7))

April 1 Debentures Redemption Investment A/c ...Dr. 3,00,000
To Bank A/c 3,00,000
(Being the DRI made equal to 15% of face value of
debentures to be redeemed)
2019
March 31 Securities Premium Reserve A/c ...Dr. 50,000
Capital Reserve A/c ...Dr. 1,75,000
Statement of Profit and Loss (Finance Cost) ...Dr. 1,75,000
To Loss on Issue of Debentures A/c 4,00,000
(Being the loss on issue of debentures written off)
March 31 10% Debentures A/c ...Dr. 20,00,000
Premium on Redemption of Debentures A/c ...Dr. 2,00,000
To Debentureholders’ A/c 22,00,000
(Being the amount due on redemption)
March 31 Debentureholders’ A/c ...Dr. 22,00,000
To Bank A/c 22,00,000
(Being the payment made to debentureholders)

March 31 Debentures Redemption Reserve A/c ...Dr. 5,00,000
To General Reserve A/c 5,00,000
(Being the one-half of DRR transferred to General Reserve on
redemption of one-half debentures)
2020
March 31 Bank A/c ...Dr. 3,00,000
To Debentures Redemption Investment A/c 3,00,000
(Being the DRI realised)