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प्रश्न
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.
उत्तर
Journal
|
Date |
Particulars |
L.F. |
Debit Amount (₹) |
Credit Amount (₹) |
|
|
2017 |
|
|
|
|
|
|
April 01 |
Bank A/c |
Dr. |
|
40,00,000 |
|
|
|
To Debenture Application A/c |
|
|
40,00,000 |
|
|
|
(Debenture application money received) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Debenture Application A/c |
Dr. |
|
40,00,000 |
|
|
|
Loss on Issue of Debentures A/c |
Dr. |
|
2,00,000 |
|
|
|
To 8% Debentures A/c |
|
|
40,00,000 |
|
|
|
To Premium on Redemption of Debenture |
|
|
2,00,000 |
|
|
|
(Debenture issued with the term repayable at 5% premium) |
|
|
|
|
|
|
|
|
|
|
|
|
2018 |
|
|
|
|
|
|
March, 31 |
Statement of Profit and Loss (See Note 1) |
Dr. |
|
10,00,000 |
|
|
|
To Debenture Redemption Reserve A/c |
|
|
10,00,000 |
|
|
|
(Surplus amount is transferred to Debenture Redemption Reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
2019 |
|
|
|
|
|
|
March 31 |
Statement of Profit and Loss (See Note 1) |
Dr. |
|
10,00,000 |
|
|
|
To Debenture Redemption Reserve A/c |
|
|
10,00,000 |
|
|
|
(Surplus amount is transferred to Debenture Redemption Reserve) |
|
|
|
|
|
|
|
|
|
|
|
|
April 30 |
Debenture Redemption Investment A/c (See Note 2) |
Dr. |
|
6,00,000 |
|
|
|
To Bank A/c |
|
|
6,00,000 |
|
|
|
(Investment is made in specified securities equal to 15% of the value of debentures redeemed) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
8% Debentures A/c |
Dr. |
|
40,00,000 |
|
|
|
Premium on Redemption of Debenture A/c |
Dr. |
|
2,00,000 |
|
|
|
To Debentureholders’ A/c |
|
|
42,00,000 |
|
|
|
(Debenture due for redemption along with premium) |
|
|
|
|
|
|
|
|
|
|
|
|
June 30 |
Bank A/c |
Dr. |
|
6,00,000 |
|
|
|
To Debenture Redemption Investment A/c |
|
|
|
6,00,000 |
|
|
(Investment made in securities, now encashed) |
|
|
|
|
| June 30 | Debentureholders’ A/c | Dr. | 42,00,000 | ||
| To Bank A/c | 42,00,000 | ||||
| (Amount paid to Debentureholders) | |||||
|
|
|
|
|
|
|
|
June 30 |
Debenture Redemption Reserve A/c |
Dr. |
|
20,00,000 |
|
|
|
To General Reserve A/c |
|
|
20,00,000 |
|
|
|
(Debenture Redemption Reserve transferred to General Reserve) |
|
|
|
|
Note:
1. As prescribed by Section 71(4) of the Companies Act, 2013, companies are required to create DRR at 25% of the total value of debentures. However, it purely depends upon a company and its discretion to transfer more amount to DRR than the prescribed amount of 25% in the case of companies for whom it is mandatory to create DRR out of profits. In this case, as explicitly specified about company's discretion, DRR has been created for a total of Rs 20,00,000 which is 50% of the total value of redeemable debentures.
2. 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.
3. As explicilty stated in the question, entries for interest on debentures has not been passed.
APPEARS IN
संबंधित प्रश्न
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Relay Ltd. (an unlisted Non NBFC) redeems its 8,000, 10% Debentures of ₹ 100 each in instalments as follows:
| Date of Redemption | Debentures to be redeemed |
| 31st March, 2019 | 2,000 |
| 31st March, 2020 | 5,000 |
| 31st March, 2021 | 1,000 |
On the basis of the above details, what will be the amount of Debenture Redemption Reserve which the company will transfer to General Reserve on 31st March, 2021?
What is the maximum amount of debentures which an unlisted company, other than a NBFC and HFC, can redeem out of its capital?
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| 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.
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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.
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