B Ltd , redeemed 6,000 ; 9% debentures of rs 100 each which were issued at a discount of - Accountancy - Issue and Redemption of Debentures

Question

B Ltd , redeemed 6,000 ; 9% debentures of rs 100 each which were
issued at a discount of 5% BY CONVERTING THEM INTO EQUITY SHARES OF
RS 10 EACH ISSUED AT A DISCOUNT OF 55 Journalise
PLs answer practical problem no - 34 and 35 also
i need it
REDEMPTION OF DEBENTURES

Mohammed Vaseem · Accepted Answer

Note- Here, in order to solve the question, discount on issue of equity share has been taken Rs 0 5 per share in place of 55 Following are the two situations when â€˜debentures originally issued at discountâ€™ are converted into shares Situation 1- conversion of debentures originally issued at discount into shares before maturity Situation 2- conversion of debentures originally issued at discount into shares on maturity Solution Situation 1- conversion of debentures originally issued at discount into shares before maturity Explanation- As per Companies Act, to convert debentures which had originally issued at discount into shares before maturity, amount due for redemption will be taken equal to the amount of originally received from debentures i e Rs 5,70,000 (Rs 6,00,000 â€“ Rs 30,000) Date Particulars Debit Amount Rs Credit Amount Rs 9% Debentures A/c (6,000 Deb Ã— Rs 100 each) Dr 6,00,000 To Dis on Issue of Deb A/c (6,000 Deb Ã— Rs 5 each) 30,000 To Debentureholders A/c (6,000 Deb Ã— Rs 95 each) 5,70,000 (6,000 9% Debentures of Rs 100 each which had been issued at discount at of Rs 5, due for redemption) Debenture holders A/c Dr 5,70,000 Discount on Issue of Shares A/c (60,000Ã—Rs 5 each) Dr 30,000 To Equity Share Capital A/c(60,000SharesÃ—Rs 10 each) 6,00,000 (60,000 shares of Rs 10 each issued at discount of Rs 0 5 each to debenture holders)

Situation 2- conversion of debentures originally issued at discount into shares on maturity Explanation- As per Companies Act, to convert debentures which had originally issued at discount into shares at maturity, amount due for redemption will be taken as per the terms of redemption (at par, premium or at discount) Here, debentures will be due for redemption at par Date Particulars Debit Amount Rs Credit Amount Rs 9% Debentures A/c (6,000 Deb Ã— Rs 100 each) Dr 6,00,000 To Debentureholders A/c (6,000 Deb Ã— Rs 95 each) 6,00,000 (6,000 9% Debentures of Rs 100 each which had been issued at discount at of Rs 5, due for redemption) Debenture holders A/c Dr 6,00,000 Discount on Issue of Shares A/c (60,000Ã—Rs 5 each) Dr 31,578 5 To Equity Share Capital A/c(63,157sharesÃ—Rs 10 each) 6,31,570 To Bank A/c 8 5 (60,000 shares of Rs 10 each issued at discount of Rs 0 5 each to debenture holders and fraction amount paid in cash)

In place giving question numbers, kindly post the questions or give reference with question numbers so that answers can be provided as per the question

Date	Particulars		Debit Amount Rs	Credit Amount Rs

	9% Debentures A/c (6,000 Deb × Rs 100 each)	Dr.	6,00,000
	To Dis. on Issue of Deb. A/c (6,000 Deb × Rs 5 each)			30,000
	To Debentureholders A/c (6,000 Deb × Rs 95 each)			5,70,000
	(6,000 9% Debentures of Rs 100 each which had been issued at discount at of Rs 5, due for redemption)

	Debenture holders A/c	Dr.	5,70,000
	Discount on Issue of Shares A/c (60,000×Rs .5 each)	Dr.	30,000
	To Equity Share Capital A/c(60,000Shares×Rs 10 each)			6,00,000
	(60,000 shares of Rs 10 each issued at discount of Rs 0.5 each to debenture holders)

Date	Particulars		Debit Amount Rs	Credit Amount Rs

	9% Debentures A/c (6,000 Deb × Rs 100 each)	Dr.	6,00,000
	To Debentureholders A/c (6,000 Deb × Rs 95 each)			6,00,000
	(6,000 9% Debentures of Rs 100 each which had been issued at discount at of Rs 5, due for redemption)

	Debenture holders A/c	Dr.	6,00,000
	Discount on Issue of Shares A/c (60,000×Rs .5 each)	Dr.	31,578.5
	To Equity Share Capital A/c(63,157shares×Rs 10 each)			6,31,570
	To Bank A/c			8.5
	(60,000 shares of Rs 10 each issued at discount of Rs 0.5 each to debenture holders and fraction amount paid in cash)

B Ltd., redeemed 6,000 ; 9% debentures of rs. 100 each which were issued at a discount of 5% BY CONVERTING THEM INTO EQUITY SHARES OF RS. 10 EACH ISSUED AT A DISCOUNT OF 55. Journalise. PLs answer practical problem no . - 34 and 35 also. i need it. REDEMPTION OF DEBENTURES

B Ltd., redeemed 6,000 ; 9% debentures of rs. 100 each which were issued at a discount of 5% BY CONVERTING THEM INTO EQUITY SHARES OF RS. 10 EACH ISSUED AT A DISCOUNT OF 55. Journalise.

PLs answer practical problem no . - 34 and 35 also.

i need it.

REDEMPTION OF DEBENTURES