Illustration 5

P/L A/c Dr 25,00,000

To Debenture redemption 25,00,000
reserve A/c
1,00,000 * 100 = 1,00,00,000 * 25%
(Being 25% of Rs. 1,00,00,000
transferred to DRR as per rule)
Debenture Redemption Reserve A/c Dr 15,00,000
To Bank A/c 15,00,000
25% - 10% = 15%
1,00,00,000 * 15%
(Being 15% of Rs.1,00,00,000 is
invested in DRR A/c)
Profit and Loss A/c Dr 10,00,000
To Debenture Interest A/c 10,00,000
1,00,00,000 * 10%
Profit and Loss A/c Dr 10,00,000
To Debenture Interest A/c 10,00,000
(Being interest Paid at rate of 10% on 1
crore)
Debenture A/c Dr 1,00,00,00
Premium on redemption debenture Dr 0
A/c 10,00,000 1,10,00,000
To Debenture holder A/c
Debenture Holder A/c Dr 1,10,00,00
To bank A/c 0 1,10,00,000
Debenture redemption Reserve A/c Dr 25,00,000
To General Reserve A/c 25,00,000
Bank A/c Dr 15,00,000
To Debenture Redemption 15,00,000
Reserve A/c
(Being the amt recd after maturity)
Illustration 35
1.05.2018 Own Debentures A/c Dr 9,700
Debenture Interest A/c Dr 400 10,100
To Bank A/c
(Being purchased 100
debentures @ Rs 97, Interest
4months)
100 * 97 = 9,700
Interest 9,700 * 4/12
30.06.2018 Debenture Interest A/c Dr 11,600
To Bank A/c 11,400
To Interest on own 200
debenture A/c
(2000 – 100 = 1,900 )
1900 * 6/12 = 11,400
100 debentures * 2/12 * 12%
= 2 * Rs. 100
1.12.2018 Bank A/c Dr 10,500
To Own Debenture A/c 10,000
To Interest on own 500
debenture A/c
(100 * 105 = 10,500)
100 * 100 = 10,000

1.12.2018 Own Debenture A/c Dr 300

To Profit on Resale of 300
Debenture A/c
(10,000 – 9700 = 300)
31.12.2018 Debenture Interest A/c Dr 12,000=
To bank A/c 12,000
(1900 + 100 = 2000 * 6 / 12 *
12% = 120 * Rs.100
31.12.2018 Interest on own Debenture
A/c Dr 700
Profit on resale of debenture Dr 300 1,000
A/c
To Profit and loss A/c
31.12.2018 P/L A/c Dr 24,000
To Debenture Interest A/c 24,000
(2000 * 12% = 240 *Rs. 100
(Being amt in Debenture
interest transferred to the P/L
A/c t the end of the year)