On 31.03.2018, W Ltd. had the following balances in its books:
9% Debentures
6,00,000
Debenture Redemption Reserve
1,00,000
Debentures Redemption Investment 45,000
On that date, the company decided to transfer 50,000 to debenture redemption reserve and redeemed
3,00,000 worth of debentures. Pass necessary journal entries in the books of the company.
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Note: 1. Here, the entry for transferring the amount of DRR to General Reserve has been passed with 50% of DRR amount since the company has not fully redeemed. Therefore 50% of DRR amount ie . 50% of 1,50,000 has been transferred to General Reserve. 2. As the question was silent, entries for interest on debentures have ignored. However, there been provided for reference.Read more on Sarthaks.com - https://www.sarthaks.com/473347/on-31st-march-2016-w-ltd-had-the-following-balances-in-its-books-9-debentures-rs-6-00-000
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