Page 43 - AAAXII

Model Test Papers M.39

12. JOURNAL OF GREEN LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
2018
March 31 General Reserve A/c ...Dr. 50,000
To Debentures Redemption Reserve A/c 50,000
(Being the profit of ` 50,000 transferred to Debentures Redemption Reserve)
Bank A/c ...Dr. 45,000
To Debentures Redemption Investment A/c 45,000
(Being the Debentures Redemption investment realised)
9% Debentures A/c ...Dr. 3,00,000
To Debentureholders’ A/c 3,00,000
(Being the amount due to debentureholders on redemption)
Debentureholders’ A/c ...Dr. 3,00,000
To Bank A/c 3,00,000
(Being the payment made to Debentureholders)
Debentures Redemption Reserve A/c ...Dr. 75,000
To General Reserve A/c 75,000
(Being the proportionate amount transferred (Note))

` 1,50,000
Note: Proportionate Amount = ¥ ` 3,00,000 = ` 75,000.
` 6,00,000
Or
JOURNAL OF STRONG LTD.
Date Particulars L.F. Dr. (`) Cr. (`)
Before Redemption of Debentures
Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 2,50,000
To Debentures Redemption Reserve A/c (` 10,00,000 × 25%) 2,50,000
(Being the transfer of profit to Debentures Redemption Reserve)
Debentures Redemption Investment A/c (` 10,00,000 × 15%) ...Dr. 1,50,000
To Bank A/c 1,50,000
(Being the investment made @ 15% of face value of debentures)
Bank A/c ...Dr. 1,50,000
To Debentures Redemption Investment A/c 1,50,000
(Being the investment encashed)
On Redemption of Debentures
10% Debentures A/c ...Dr. 10,00,000
Premium on Redemption of Debentures A/c ...Dr. 1,00,000
To Debentureholders’ A/c 11,00,000
(Being the amount due to debentureholders on redemption)
Debentureholders’ A/c ...Dr. 11,00,000
To Bank A/c 11,00,000
(Being the amount due to debentureholders paid)
Debentures Redemption Reserve A/c ...Dr. 2,50,000
To General Reserve A/c 2,50,000
(Being the transfer of Debentures Redemption Reserve to General
Reserve on the redemption of all the debentures)