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Model Test Papers M.341

9. JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
2017
March 31 Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 75,000
To Debentures Redemption Reserve A/c 75,000
(Being the profit transferred to Debentures Redemption Reserve) (Note 2)
2017
April 1 Debentures Redemption Investment A/c ...Dr. 1,50,000
To Bank A/c 1,50,000
(Being the investment made equal to 15% of nominal (face) value of
debentures to be redeemed)
2018
March 31 Bank A/c ...Dr. 1,65,000
To Debentures Redemption Investment A/c 1,50,000
To Interest Earned A/c 15,000
(Being the investment encashed along with interest)
8% Debentures A/c ...Dr. 10,00,000
To Debentureholders’ A/c 10,00,000
(Being the amount due to debentureholders on redemption)
Debentureholders’ A/c ...Dr. 10,00,000
To Bank A/c 10,00,000
(Being the payment made to debentureholders)
Debentures Redemption Reserve A/c ...Dr. 2,50,000
To General Reserve A/c 2,50,000
(Being the Debentures Redemption Reserve transferred to General Reserve)
Notes: 1. Interest on Debentures have been ignored.
`
2. *DRR required (25% of ` 10,00,000) 2,50,000
Less: Existing Balance 1,75,000
Transferred to DRR 75,000
10. AN EXTRACT OF INCOME AND EXPENDITURE ACCOUNT
Dr. for the year ended 31st March, 2018 Cr.
Expenditure ` Income `
By Subscription 8,00,000
AN EXTRACT OF BALANCE SHEET as at 31st March, 2018
Liabilities ` Assets `
Subscription Received in Advance 1,20,000 Subscription Outstanding:
(For 2018–19) for 2016–17 (` 1,20,000 – ` 1,00,000) 20,000
for 2017–18 (` 1,00,000 – ` 20,000) 80,000 1,00,000
Working Note:
Calculation of Subscription Income for 2017–18: `
Subscription received during 2017–18 for 2017–18 6,00,000
Add: Subscription received during 2016–17 for 2017–18 1,20,000
(Subscription received in advance on 31st March, 2017)
Subscription outstanding for 2017–18 80,000
8,00,000