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M.214 An Aid to Accountancy—CBSE XII

2017 On Realisation of Investment:
March 31 Bank A/c ...Dr. 81,875
To Debentures Redemption Investment A/c 75,000
To Interest Earned A/c 6,875
(Being the investment realised and interest received for 11 months)
On Redemption of Debentures:
9% Debentures A/c ...Dr. 5,00,000
Premium on Redemption of Debentures A/c ...Dr. 50,000
To Debentureholders’ A/c 5,50,000
(Being the payment due to debentureholders on redemption)
Debentureholders’ A/c ...Dr. 5,50,000
To Bank A/c 5,50,000
(Being the payment made to debentureholders)
On Transfer of DRR to General Reserve:
Debentures Redemption Reserve A/c ...Dr. 5,00,000
To General Reserve A/c 5,00,000
(Being the DRR transferred to General Reserve)
Note: Since the debentures are redeemed out of profit, an amount equal to the total nominal (face) value of debentures
outstanding, i.e., ` 5,00,000 is transferred to DRR instead of 25% as required by the Companies Act, 2013.
Or
JOURNAL OF OMAXE LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
(i) Bank A/c (2,50,000 × ` 100) ...Dr. 2,50,00,000
To Debentures Application and Allotment A/c 2,50,00,000
(Being the application money received for 2,50,000 debentures @ ` 100
per debenture)
Debentures Application and Allotment A/c ...Dr. 2,50,00,000
Loss on Issue of Debentures A/c ...Dr. 20,00,000
To 8% Debentures A/c (2,50,000 × ` 100) 2,50,00,000
To Premium on Redemption of Debentures A/c (2,50,000 × ` 8) 20,00,000
(Being 2,50,000; 8% Debentures of ` 100 each issued at par and redeemable
at a premium of 8%)
(ii) Bank A/c ...Dr. 2,60,00,000
To Debentures Application and Allotment A/c 2,60,00,000
(Being the application money received for 2,50,000 debentures
@ ` 104 per debenture)
Debentures Application and Allotment A/c ...Dr. 2,60,00,000
Loss on Issue of Debentures A/c ...Dr. 12,50,000
To 8% Debentures A/c (2,50,000 × ` 100) 2,50,00,000
To Securities Premium Reserve A/c (2,50,000 × ` 4) 10,00,000
To Premium on Redemption of Debentures A/c (2,50,000 × ` 5) 12,50,000
(Being 2,50,000; 8% Debentures of ` 100 each issued at a premium of
4% and redeemable at a premium of 5%)
(iii) Bank A/c ...Dr. 2,62,50,000
To Debentures Application and Allotment A/c 2,62,50,000
(Being the application money received for 2,50,000 debentures
@ ` 105 per debenture)
Debentures Application and Allotment A/c ...Dr. 2,62,50,000
To 8% Debentures A/c 2,50,00,000
To Securities Premium Reserve A/c 12,50,000
(Being 2,50,000; 8% Debentures fo ` 100 each issued at a premium of 5%
and redeemable at par)