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Chapter 10 . Company Accounts—Redemption of Debentures 10.7

2018
March 31 Interest on Debentures A/c ...Dr. 2,00,000
To Debentureholders’ A/c (WN 4) 1,80,000
To TDS Payable A/c 20,000
(Debentures’ interest due)
March 31 Debentureholders’ A/c ...Dr. 1,80,000
To Bank A/c 1,80,000
(Debentures’ interest paid)
March 31 TDS Payable A/c ...Dr. 20,000
To Bank A/c 20,000
(Tax deducted at source deposited in Government Account)
March 31 8% Debentures A/c ...Dr. 12,50,000
To Debentureholders’ A/c 12,50,000
(Payment due to debentureholders on redemption)
March 31 Debentureholders’ A/c ...Dr. 12,50,000
To Bank A/c 12,50,000
(Payment due to debentureholders discharged)
March 31 Debentures Redemption Reserve A/c ...Dr. 1,25,000
To General Reserve A/c 1,25,000
(Amount proportionate to 12,500 debentures redeemed transferred
from DRR to General Reserve)
March 31 Statement of Profit and Loss (Finance Cost) ...Dr. 2,00,000
To Interest on Debentures A/c 2,00,000
(Interest on debentures transferred)
2019
March 31 Interest on Debentures A/c ...Dr. 1,00,000
To Debentureholders’ A/c 90,000
To TDS Payable A/c 10,000
(Interest due on debentures)
March 31 Debentureholders’ A/c ...Dr. 90,000
To Bank A/c 90,000
(Debentures’ interest paid)
March 31 8% Debentures A/c ...Dr. 12,50,000
To Debentureholders’ A/c 12,50,000
(Payment due to debentureholders on redemption)
March 31 Debentureholders’ A/c ...Dr. 12,50,000
To Bank A/c 12,50,000
(Payment due to debentureholders discharged)
March 31 Bank A/c ...Dr. 2,55,000
TDS Collected (Receivable) A/c ...Dr. 7,500
To Debentures Redemption Investment A/c 1,87,500
To Interest Earned A/c 75,000
(Fixed deposit placed on 1st April, 2015 encashed and interest earned
on the same @ 10% p.a. but received after deducting tax @ 10% on all
debentures having been redeemed)