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M.420 An Aid to Accountancy—CBSE XII

9. In the Books of Bharat Ltd.
JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)

2018
March 31 Surplus, i.e., Balance in Statement of Profit and Loss A/c ...Dr. 1,20,000
To Debentures Redemption Reserve A/c 1,20,000
(Being the transfer of profit to Debentures Redemption Reserve) (WN)
April 30 Debentures Redemption Investment A/c ...Dr. 6,00,000
To Bank A/c 6,00,000
(Being the investment made in specified securities @ 15% of the
face value of the debentures)
July 31 Bank A/c ...Dr. 6,15,000
To Debentures Redemption Investment A/c 6,00,000
To Interest Earned A/c (` 6,00,000 × 10/100 × 3/12) 15,000
(Being the investment bearing 10% p.a. interest encashed)
July 31 9% Debentures A/c ...Dr. 40,00,000
Premium on Redemption of Debentures A/c ...Dr. 4,00,000
To Debentureholders’ A/c 44,00,000
(Being the amount due to debentureholders)
Debentureholders’ A/c ...Dr. 44,00,000
To Bank A/c 44,00,000
(Being the payment made to debentureholders)
Debentures Redemption Reserve A/c ...Dr. 10,00,000
To General Reserve A/c 10,00,000
(Being the transfer of Debentures Redemption Reserve to General Reserve)
Working Note: Calculation of amount to be transferred to DRR: `
Debentures Redemption Reserve (DRR) Required (25% of ` 40,00,000) 10,00,000
Less: Existing Balance of DRR 8,80,000
Amount to be transferred to Debentures Redemption Reserve 1,20,000
10. JOURNAL
Date Particulars L.F. Dr. (`) Cr. (`)
Equity Share Capital A/c (20 × ` 7) ...Dr. 140
To Calls-in-Arrears A/c (20 × ` 2) 40
To Forfeited Shares A/c (20 × ` 5) 100
(Being 20 equity shares forfeited for non-payment of first call
of ` 2 per share)
Bank A/c ...Dr. 120
To Equity Share Capital A/c (15 × ` 7) 105
To Securities Premium Reserve A/c 15
(Being 15 equity shares reissued as ` 7 paid-up for ` 8 per share)
Forfeited Shares A/c (15 × ` 5) ...Dr. 75
To Capital Reserve A/c 75
(Being the transfer of gain on reissue of 15 shares)