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Question
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.
Solution
i.
| Dr. | Debentureholders Account | Cr. | |||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
| 2023 | 2023 | ||||
| 31st March | To Bank A/c | 51,00,000 | 31st March | By 9% Debentures A/c | 50,00,000 |
| 31st March | To Premium on Redemption of Debentures | 1,00,000 | |||
| 51,00,000 | 51,00,000 | ||||
ii.
| Dr. | Debenture Redemption Investment Account | Cr. | |||
| Date | Particulars | Amount (₹) | Date | Particulars | Amount (₹) |
| 2022 | 2023 | ||||
| 1st April | To Bank A/c | 7,50,000 | 31st March | By Bank A/c | 7,57,500 |
| 2023 | |||||
| 31st March | To Statement of Profit & Loss (Profit) | 7,500 | |||
| 7,57,500 | 7,57,500 | ||||
Working Note:
Calculation of Investment = 50,00,000 × 15% = ₹ 7,50,000
Realised value = 7,50,000 × 10% = ₹ 7,57,500
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