Mansi Ltd. had 6,000; 10% Debentures of ₹ 100 each due for redemption on 31st March, 2017. Assuming that the debentures were redeemed out of profits, pass necessary journal entries for the redemption of debentures. There was a credit balance of ₹ 6,00,000 in Surplus, i.e, Balance in Statement of Profit and Loss.
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The necessary journal entries in the books of the company are prepared below:
Explanation:
Given,
Mansi Ltd. had 6,000;
10% Debentures of ₹ 100 each due for redemption on 31st March, 2017.
Credit balance of ₹ 6,00,000 in Surplus,
i.e, Balance in Statement of Profit and Loss.
In case of redemption of debentures by profits, 100% of the nominal value of debentures is transferred to DRR A/c.
Note:
As the question was silent, entries for interest on debentures have been ignored. However, these have been provided for reference.
The necessary journal entries in the books of the company are prepared below:
Attachments:
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