Question

Jatin and lalit are partners sharing profit and losses in the ratio 3 ratio 2 on 1st April 2015 they admitted Kishore as a partner for 110 sharing profits which he acquired equally from Jatin Nandlala on the following terms

Answer 1

DRR is created out of profits of the company & is debited to the statement of P&L(which means profit is reduced). now at the time of redemption of debentures, DRR is transferred to general reserve to give effect to the earlier reduction in profit.