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Question No 06 Chapter 3 – UNIMAX Class 12 Part 2 – 2021

Question No 06 Chapter 3 - UNIMAX Class 12 Part 2 - 2021

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Question No 06 Chapter 3 – UNIMAX Class 12 Part 2 – 2021

Jyoti Ltd. (an unlisted company) had issued 10,000, 8% debenture which are due to be redeemed out of profit on 1st Oct. 2022 at a premium of 5%. The company had a debenture redemption reserve of ₹ 1,10,000. It was decided to invest the required amount in Debenture Redemption Investment. Pass necessary journal entries for the redemption of debentures.

The solution of Question 06 Chapter 3 of +2 Part-2: –

Journal
 Books of ‘Jyoti’ Ltd.

Date  Particulars
L.F.DebitCredit
2022 March 31Surplus is statement in Profit & Loss A/cDr. 8,90,000 
 To Debenture redemption reserve A/c   8,90,000
 (Being transfer of profit to Debenture Redemption Reserve)    
      
April 30Debenture redemption investment A/cDr. 1,50,000 
 To Bank A/c  1,50,000
 (Being investment made @ 15% of the face value of debenture to be redeemed)    
      
Oct. 1Bank A/cDr. 1,50,000 
 To Debenture redemption investment A/c  1,50,000
 (Being investment encashed)    
      
Oct. 1Debenture A/cDr. 10,00,000 
 Premium on Redemption of debenture A/cDr. 50,000 
 To Debenture holder A/c  10,50,000
 (Being amount due on redemption)    
      
Oct. 1Debenture holder A/cDr. 10,50,000 
 To Bank A/c  10,50,000
 (Being payment of amount due to debenture holders)   
      
Oct. 1Debenture redemption reserve A/cDr. 10,00,000 
 To General reserve A/c  10,00,000
 (Being transfer of Debenture Redemption Reserve A/c to General Reserve A/c on redemption)   

Note: 

Since the debenture are to be redeemed purely out of profit, an amount equal to 100% of debenture redeemed i.e., ₹ 10,00,000 is transferred to Debenture Redemption Reserve. If such Reserve is created only with 10% of the amount of debentures redeemed, it would means that remaining 90% of the debenture have been redeemed out of capital.

End of Solution


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The solution to all questions of Chapter No. 3 – Redemption of Debentures Class 12 Unimax is shown as follows, click on the image of the question to get the solution.

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Punjab School Education Board (PSEB) Solutions of Usha Publication.

If you’re a student enrolled in the Punjab School Education Board Class 12, exploring a wide range of books to cover the syllabus thoroughly is essential. While the prescribed textbooks are undoubtedly valuable, supplementing your studies with additional resources can enhance your understanding and knowledge. Consider checking out other books that align with the curriculum, offering different perspectives and insights on the subjects you’re studying. These supplementary materials can provide you with alternative explanations, practice questions, and examples that may aid in clarifying complex concepts. Moreover, exploring diverse sources can expose you to various writing styles and viewpoints, fostering a broader understanding of the subjects. So, seize the opportunity to expand your learning by delving into other books that can complement your studies and contribute to your academic growth.

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