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Model Test Papers M.239

8. (i) Debentures Redemption Reserve Account.
(ii) An amount that is at least 25% of the nominal (face) value of the outstanding
debentures should be transferred to Debentures Redemption Reserve before the
redemption of debentures begins.
(iii) Debentures Redemption Reserve is shown in the Balance Sheet under the head
‘Shareholders’ Funds’ and sub-head ‘Reserves and Surplus’.

9. JOURNAL OF GOPALAN LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Debentures Suspense A/c ...Dr. 1,00,000
To 9% Debentures A/c 1,00,000
(Being 1,000, 9% Debentures of ` 100 each issued as collateral security)
Note to Accounts
Particulars `
1. Long-term Borrowings
5,000; 9% Debentures of ` 100 each 5,00,000
Bank Loan 80,000
1,000; 9% Debentures of ` 100 each 1,00,000
Less: Debentures Suspense A/c 1,00,000 ...
5,80,000

Or
In the Books of Pilot Pens Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Machinery A/c ...Dr. 55,000
To Kiran Machines Ltd. 55,000
(Being the machinery purchased from Kiran Machines Ltd.)
Kiran Machines Ltd. ...Dr. 5,500
To Bills Payable A/c 5,500
(Being the part payment for machinery purchased met by giving
acceptance for a bill)
Kiran Machines Ltd. ...Dr. 49,500
To 9% Debentures A/c (WN) 49,500
(Being the balance payment made by the issue of 495, 9% Debentures
of ` 100 each at par)
Working Note: Number of Debentures to be issued = (Purchase Consideration – Part Payment) ÷ Issue Price
= ` (55,000 – 5,500) ÷ ` 100 = 495 Debentures.
10.
Dr. CREDITORS FOR MEDICINES ACCOUNT Cr.
Particulars ` Particulars `

To Bank A/c (Payment Made) 6,79,000 By Balance b/d (Opening Creditors) 2,40,000
To Balance c/d (Closing Creditors) 2,04,000 By Stock of Medicines A/c (Bal. Fig.) (Purchase) 6,43,000
8,83,000 8,83,000