Answer:
JOURNAL
Date Particulars LF Amt (Dr) Amt (Cr) 2016 Mar 31 Surplus, i.e. Balance in Statement of Profit and Loss Dr 12,50,000 To Debentures Redemption Reserve A/c 12,50,000 (Being 25% of value of debentures transferred to DRR) Apr 30 Debentures Redemption Investment A/c Dr 7,50,000 To Bank A/c 7,50,000 (Being 15% of the value of debentures invested in government securities) 2017 Mar 31 Bank A/c Dr 8,18,750 To Debentures Redemption Investment A/c 7,50,000 To Interest Earned A/c \[\left( 7,50,000\times \frac{10}{100}\times \frac{11}{12} \right)\] 68,750 (Being the investments bearing 10% interest per annum encashed on redemption of debentures) Mar 31 9% Debentures A/c Dr 50,00,000 To Debenture holders' A/c 50,00,000 (Being the amount due on redemption of debentures) Mar 31 Debentureholders' A/c Dr 50,00,000 To Bank A/c 50,00,000 (Being the payment made to redeem debentures) Mar 31 Debenture Redemption Reserve A/c Dr 12,50,000 To General Reserve A/c 12,50,000 (Being the DRR transferred to general reserve after redemption of debentures)
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