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M.112 An Aid to Accountancy—CBSE XII

Debentureholders’ A/c ...Dr. 17,25,000
To Bank A/c 17,25,000
(Being the payment made to debentureholders)
Interest Earned A/c ...Dr. 18,000
To Statement of Profit and Loss (Other Income) 18,000
(Being the interest earned transferred to Statement of
Profit and Loss)

Debentures Redemption Reserve A/c ...Dr. 15,00,000
To General Reserve A/c 15,00,000
(Being the DRR transferred to General Reserve)

Notes:
1. As debentures are redeemable fully out of profit, an amount equal to the total nominal (face) value of
debentures to be redeemed will be the amount of Debentures Redemption Reserve.
2. `
Investment made 15% of ` 15,00,000 2,25,000
Add: Interest on Investment @ 8% 18,000
2,43,000
Less: TDS deducted by bank @ 10% on ` 18,000 (Interest) 1,800
2,41,200
10. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
2018
April 1 X’s Capital A/c ...Dr. 1,00,000
Y’s Capital A/c ...Dr. 1,00,000
Z’s Capital A/c ...Dr. 1,00,000
To Profit and Loss Adjustment A/c 3,00,000
(Being the profit wrongly distributed, now debited to
Partners’ Capital Accounts)
Profit and Loss Adjustment A/c ...Dr. 40,000
To Z’s Capital A/c 40,000
(Being the salary credited to Z’s Capital Account)
Profit and Loss Adjustment A/c ...Dr. 1,80,000
To X’s Capital A/c 80,000
To Y’s Capital A/c 60,000
To Z’s Capital A/c 40,000
(Being the interest on capital credited to Partners’ Capital Accounts)

Profit and Loss Adjustment A/c ...Dr. 80,000
To X’s Capital A/c 32,000
To Y’s Capital A/c 32,000
To Z’s Capital A/c 16,000
(Being the profit after salary and interest on capital credited to
Partners’ Capital Accounts in the ratio of 2 : 2 : 1)