What Journal Entries Will be Made In the Following Cases When Company Redeems Debentures At the Expiry of Period By Serving the Notice-Solution

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What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice:

 (a) when debentures were issued at par with a condition to redeem them at premium;

 (b) when debentures were issued at premium with a condition to redeem that at par; and 

(c) when debentures were issued at discount with a condition to redeem them at premium?




Journal entries

S.No.ParticularsL.F.
Amount
(Rs.)
Amount
(Rs.)
(a)Debenture A/cDr.
 Premium on Redemption of Debenture A/cDr.
    To Debenture Holders A/c
 (Amount due for  redemption of Debentures)
 Debenture Holders A/cDr.
    To Bank A/c
 (Payment made to Debenture Holders)
(b)Debenture A/cDr.
    To Debenture Holders A/c
 (Amount due for redemption of debentures that were issued at premium with term of redeemable at par)
 Debenture Holders A/cDr.
    To Bank A/c
 (Payment made to Debenture Holders)
(c)Debenture A/cDr.
 Premium on Redemption of Debenture A/cDr.
    To Debentures Holders A/c
 (Amount due for redemption on debentures that were issued at discount with the term of redeemable at premium)
 Debenture Holders A/cDr.
    To Bank A/c
 (Payment made to Debenture Holders)

Chapter-2 Issue and Redemption of Debentures-II



Location: India

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