Accountancy, asked by Nabilrahman15771, 11 months ago

Apollo Ltd. issued 21,000; 8% Debentures of ₹ 100 each on 1st April, 2011 redeemable at a premium of 8% on 30th June, 2017. The company decided to transfer the required amount to Debentures Redemption Reserve in three equal annual installments starting with 31st March, 2015. Required investment was made in Government Securities on 30th April, 2017. Ignore interest on debentures and also investment.
Pass necessary journal entries regarding issue transfer to DRR, investment, and redemption of debentures.

Answers

Answered by aami1463

Answer:

Apollo Ltd. issued 21,000; 8% Debentures of ₹ 100 each on 1st April, 2011 redeemable at a premium of 8% on 30th June, 2017. The company decided to transfer the required amount to Debentures Redemption Reserve in three equal annual installments starting with 31st March, 2015. Required investment was made in Government Securities on 30th April, 2017. Ignore interest on debentures and also investment.

Pass necessary journal entries regarding issue transfer to DRR, investment, and redemption of debentures. I will be there at your question my number is 8631358916

Answered by aburaihana123

The necessary journal entries regarding issue transfer to DRR, investment, and redemption of debentures are prepared below:

Explanation:

Given,

Apollo Ltd. issued 21,000;

8% Debentures of ₹ 100 each on 1st April, 2011 redeemable at a premium of 8% on 30th June, 2017.

Required investment was made in Government Securities on 30th April, 2017.

Calculation of amount transferred to Debenture Redemption Reserve:

As per Section 71 (4) of the Companies Act, 2013

Companies are required to create Debenture Redemption Reserve at 25% of the total value of debenture

Here, debentures worth Rs 21,00,000 are to be redeemed. so, the amount of Debenture Redemption Reserve will be:

Debenture Redemption Reserve (25%)

$=21,00,000 \times \frac{25}{100}=Rs.5,25,000$

Annual Instalments for (3 years)

$=\frac{5,25,000}{3}-Rs.1,75,000$

The necessary journal entries regarding issue transfer to DRR, investment, and redemption of debentures are prepared below:

Attachments:

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