(i) CU 20.000.000 at CU 95 per debenture on 30th September, and (ii) CU 30.000.000 at CU 97 per debenture on 31st March. Give the journal entries in the books of A Ltd. for both the years
(i) CU 20.000.000 at CU 95 per debenture on 30th September, and (ii) CU 30.000.000 at CU 97 per debenture on 31st March. Give the journal entries in the books of A Ltd. for both the years
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
On 1st April. 2015 A Ltd. made an issue of 1.000.000 14% debentures of CU 100 each at CU 98 per debenture. According to the terms of issue, the company should redeem 10.000 debentures either by purchasing them from the open market or by drawing lots at par at the company's option. Profit, if any, on redemption is to be transferred to capital reserve.
The company's accounting year ends on 31st March. Interest is payable on 30th September and 31st Marc
During 2015-16 the company wrote off 20% of Debenture Discount Account.
During 2018-19, the company purchased and cancelled the debentures as given below:
(i) CU 20.000.000 at CU 95 per debenture on 30th September, and (ii) CU 30.000.000 at CU 97 per debenture on 31st March.
Give the journal entries in the books of A Ltd. for both the years
Transcribed Image Text:On 1st April, 2015 A Ltd. made an issue of 1.000.000 14% debentures of CU 100
each at CU 98 per debenture. According to the terms of issue, the company should
redeem 10.000 debentures either by purchasing them from the open market or by
drawing lots at par at the company's option. Profit, if any, on redemption is to be
transferred to capital reserve.
The company's accounting year ends on 31st March. Interest is payable on 30th
September and 31st March.
During 2015-16 the company wrote off 20% of Debenture Discount Account.
During 2018-19, the company purchased and cancelled the debentures as given
below:
(i) CU 20.000.000 at CU 95 per debenture on 30th September, and
(ii) CU 30.000.000 at CU 97 per debenture on 31st March.
Give the journal entries in the books of A Ltd. for both the years
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