Q6 please give answer
Q.6 Gati Ltd., has issued 30,000, 8% Debentures of Rs 100 each of which one-third is due for redemption on March 31st 2015. The company has in its Debenture redemption Reserve Account a balance of Rs. 3,80,000. Required Investment is made in fixed deposit on 30th April 2014 bearing interest @ 6% p.a. Record the necessary journal entries for the Redemption of Debentures.
[Ans. Debenture Redemption Investment Rs. 1,50,000. Interest earned on fixed deposit Rs. 8,250. Amount transferred to Debenture Redemption Reserve Rs. 3,70,000.]
Hint : Debenture Redemption Reserve will not be transferred to General Reserve A/c since all debentures are not redeemed.
[Ans. Debenture Redemption Investment Rs. 1,50,000. Interest earned on fixed deposit Rs. 8,250. Amount transferred to Debenture Redemption Reserve Rs. 3,70,000.]
Hint : Debenture Redemption Reserve will not be transferred to General Reserve A/c since all debentures are not redeemed.
Dear Student,
Journal entries for Redemption of debentures of Gati Ltd.
Regards,
Journal entries for Redemption of debentures of Gati Ltd.
Date | Particulars | LF | Amount (in Rs) | Amount (in Rs) |
Apr 30, 2014 | Debenture Investment A/c (3,00,000*1/3*15%) | Dr | 1,50,000 | |
To Bank A/c | 1,50,000 | |||
(15% investment made one year before redemption of debentures) | ||||
Mar 31, 2015 | Statement of Profit & Loss A/c (30,000*100*25%-3,80,000) | Dr | 3,70,000 | |
To Debenture Redemption Reserve A/c | 3,70,000 | |||
Interest on Fixed deposits A/c (1,50,000*6%*11/12) | Dr | 8,250 | ||
To Statement of Profit & Loss | 8,250 | |||
(Interest earned for 9 months) |
Regards,