Advertisements
Advertisements
प्रश्न
India Textiles Corporation Ltd. has outstanding ₹ 50,00,000; 9% Debentures of ₹ 100 each due for redemption on 31st July, 2019. Pass Journal entries for redemption assuming that there is a balance of ₹ 3,00,000 in Debentures Redemption Reserve on the date of redemption.
उत्तर
Books of India Textiles Corporation Ltd.
Journal
|
Date |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
2019 |
Statement of Profit and Loss |
Dr. |
|
9,50,000 |
|
|
March 31 |
To Debenture Redemption Reserve A/c |
|
|
9,50,000 |
|
|
|
(Profit transferred to Debenture Redemption Reserve) |
|
|
|
|
|
|
|
|
|
|
|
| April 30 | Debenture Redemption Investment A/c | Dr. | 7,50,000 | ||
| To Bank A/c | 7,50,000 | ||||
| (Investment is made in specified securities equal to the 15% value of debentures redeemed) | |||||
| 2019 | |||||
|
July 31 |
9% Debentures A/c |
Dr. |
|
50,00,000 |
|
|
|
To Debentureholders’ A/c |
|
|
50,00,000 |
|
|
|
(Debentures due for redemption) |
|
|
|
|
|
|
|
|
|
|
|
| July 31 | Bank A/c | Dr. | 7,50,000 | ||
| To Debenture Redemption Investment A/c | 7,50,000 | ||||
| (Investment made in securities is now encashed) | |||||
|
July 31 |
Debentureholders’ A/c |
Dr. |
|
50,00,000 |
|
|
|
To Bank A/c |
|
|
50,00,000 |
|
|
|
(Payment made to debentureholders) |
|
|
|
|
|
|
|
|
|
|
|
|
July 31 |
Debenture Redemption Reserve A/c |
Dr. |
|
12,50,000 |
|
|
|
To General Reserve A/c |
|
|
12,50,000 |
|
|
|
(Debenture Redemption Reserve transferred to General Reserve) |
|
|
|
|
Working Notes:
WN1: Calculation of amount transferred to DRR
|
Amount for DRR (25 % of Debentures Issued) `= 5000000 xx 25 / 100 ` = |
Rs 1250000 |
| Less : Amount already exist in DRR | Rs 300000 |
| DRR to be created for redemption | Rs 950000 |
WN 2: Calculation of amount Invested in Specified Securities
Investment made in Specified Securities
`= 50,00,000 xx 15/100 = Rs 7,50,000`
*As per circular no. 04/2015 issued by Ministry of Corporate Affairs (dated 11.02.2013), every company required to create/maintain DRR shall on or before the 30th day of April of each year, deposit or invest, as the case may be, a sum which shall not be less than fifteen percent of the amount of its debentures maturing during the year ending on the 31st day of March next following year. Accordingly, entries for DRR and Investment have been passed in the previous accounting year.
Note: Entries for interest on debentures have been ignored in the above solution as the question was silent in this regards. However, the students' may journalise the entries related to interest on debentures as given below.
Journal
|
Date |
Particular |
|
L.F. |
Debit Amount |
Credit Amount |
|
2019 |
|
||||
|
Mar. 31 |
Debenture Interest A/c |
Dr. |
1,50,000 |
||
|
|
To Debentureholders’ A/c |
|
1,50,000 |
||
|
|
(Interest on 9% debentures due) |
|
|||
|
|
|
||||
|
Mar. 31 |
Debentureholders’ A/c |
Dr. |
1,50,000 |
||
|
|
To Bank A/c |
|
1,50,000 |
||
|
|
(Payment of interest to debentureholders’) |
|
|||
|
|
|
||||
|
Mar. 31 |
Statement of Profit and Loss |
Dr. |
1,50,000 |
||
|
|
To Debenture Interest A/c |
|
1,50,000 |
||
|
|
(Transfer of debenture interest to Statement of Profit and Loss) |
|
APPEARS IN
संबंधित प्रश्न
State the provisions of the Companies Act, 2013 for the creation of 'Debenture Redemption Reserve'.
X Ltd. had Rs 10,00,00 9% debentures due to be redeemed out of profits on 1st October 2009 at a premium of 5%. The company had a
Debentures Redemption Reserve of Rs 4,14,000. Pass necessary journal entries at the time of redemption.
Nirbhai Chemicals Ltd. issued ₹ 10,00,000; 6% Debentures of ₹ 50 each at a premium of 8% on 30th June, 2018 redeemable on 30th June, 2019. The issue was fully subscribed. Pass Journal entries for issue and redemption of debentures. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures? Also, state how much amount should be invested in specified securities?
On 31st March, 2003, G Ltd. had ₹ 8,00,000;9% Debentures due for redemption. The company had a balance of ₹ 1,40,000 in its Debentures Redemption Reserve . Pass necessary journal entries for redemption of debentures.
Manish Ltd. issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2017. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2019. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2018 and ₹ 10,00,000 on 31st March, 2019.
Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest or loss on issue of debentures.
On 1st April, 2016, following were the balances of Blue Bird Ltd.:
| 10% Debentures (redeemable on 30th September, 2017) | ₹ 15,00,000 |
| Debentures Redemption Reserve | ₹ 2,00,000 |
The company met the requirements of the Companies Act, 2013 regarding Debentures Redemption Reserve and Investment and redeemed the debentures.
Pass necessary Journal entries for the above transactions in the books of the company.
On 1st April, 2013 the following balances appeared in the books of Blue and Green Ltd.:
12%Debentures (Redeemable on 31st August, 2015)
₹ 20,00,000
Debentures Redemption Reserve ₹ 2,00,000.
The company met the requirements of Companies Act, 2013 regarding Debentures Redemption Reserve and Debentures Redemption Investments and redeemed the debentures.
Ignoring interest on investments, pass necessary journal entries for the above transactions in the books of company.
Hp Ltd. has 1,00,000;8% Debentures of ₹ 50 each due for redemption in five equal annual installments starting from 30th June, 2015. Debentures Redemption Reserve has a balnce of ₹ 5,00,000 on that date . Pass journal entries.
Venus Ltd. had 9,000, 9% Debentures of ₹ 100 each due for redemption . These debentures are to be redeemed in 3 equal installments (starting from 31st March,2015) at a premium of 10%. The company had a balance of ₹ 25,000 in the Debentures Redemption Reserve .
Pass necessary entries for redemption of debentures assuming that company transfer the balance of DRR to General Reserve after redeeming all the debentures.
Tata Motors Ltd. issued 40,000;7% Debentures of ₹ 100 each on 1st July,2009 redeemable at premium of 5% as under:
On 31st March,2015 16,000 Debentures
On 31st March,2016 16,000 Debentures
On 31st March,2017 8,000 Debentures
It was decided to transfer amount out of profit to Debentures Redemption Reserve ₹ 2,00,000 on 31st March, 2012; ₹ 4,00,000 on 31st March , 2013 and balance on 31st March, 2014. It invested the required amount in terms of the Companies Act, 2013 in Government Securities and decided to realise them after last redemption . Paas journal entries ignoring interest .
'Ananya Ltd.' had an authorised capital of ₹ 10,00,00,000 divided into 10,00,000 equity shares of ₹ 100 each. The company had already issued 2,00,000 shares. The dividend paid per share for the year ended 31st March,2007 was ₹ 30 . The management decided to export its products to African countries . To meet the requirements of additional funds, the finance manager put up the following three alternate proposals before the Board of Directors:
(a) Issue 47,500 equity shares at a premium of ₹ 100 per share .
(b) Obtain a long-term loan from bank which was available at 12% per annum.
(c) Issue 9% Debentures at a discount of 5%.
After evaluating these alternatives , the company decided to issue 1,00,000,9% Debentures on 1st April,2008. The face value of each debentures was ₹ 100 . These debentures were redeemable in four installments starting from the end of third year, which were as follows:
| Year | III | IV | V | VI |
| Amount (₹) | 10,00,000 | 20,00,000 | 30,00,000 | 40,00,000 |
Prepare 9% Debenture Account form 1st April, 2008 till all the debentures were redeemed.
Choose the appropriate alternative from the given options:
Shahi Ltd. decided to redeem its 8,000, 11% debentures of ₹ 100' each at a premium of 10%. The minimum amount transferred to the debenture redemption reserve will be:
Fill in the blank.
The portion of uncalled capital to be called only in the event of winding up of the company is called ____________.
Sunrise Ltd. a listed NBFC, had outstanding 20,000, 7% Debentures of ₹ 100 each, due for redemption on 31st March, 2022.
As per the provisions of the Companies Act, 2013, what amount, if any, does the company need to transfer to Debenture Redemption Reserve, before it can redeem the debentures?
On 1st April, 2022, the following balances appeared in the books of Alpha Pvt. Ltd.
| 9% Debentures redeemable on 31st March, 2023, at a premium of 2% | ₹ 50,00,000 |
| Debenture Redemption Reserve | ₹ 5,00,000 |
The Debenture Redemption Investment, which was purchased by the company on 1st April, 2022, was realised at 101% on the date of redemption and the debentures were redeemed on the due date.
You are required to prepare the following accounts for the year 2022-23 in the books of Alpha Pvt. Ltd.
- Debenture holders' Account.
- Debenture Redemption Investment Account.
On 1st April, 2022, Resorts Ltd. (a listed construction company) had 60,000, 5% Debentures of ₹ 100 each due for redemption at par on 31st March, 2023.
As per the law, investment was made in a fixed deposit of a bank on 30th April, 2022, earning interest @ 5% per annum.
Tax @ 10% was deducted by the bank on the interest.
You are required to pass necessary journal entries in the year of redemption of debentures, including entries for interest on Debenture Redemption Investment. (Ignore the interest on Debentures)
