In Q11 shouldnt the redemption entry be
% Debentures DR 40,000
Premium payable on Redemption DR 4,000
To Own Debentures 38,600
To Gain on cancellation of debentures 5,400
Why isnt this entry given in the solution???
Dear Student
If the debentures are redeemed before their Maturity Date, then Premium is not payable on redemption. In this question, the debentures are 4,000 in total and the redemption is done for only 400 out of them. The total maturity of these debentures will be after 10 years.
Hope this information clarifies your doubts. Keep posting :-)
Regards
If the debentures are redeemed before their Maturity Date, then Premium is not payable on redemption. In this question, the debentures are 4,000 in total and the redemption is done for only 400 out of them. The total maturity of these debentures will be after 10 years.
Hope this information clarifies your doubts. Keep posting :-)
Regards