TS Grewal Accountancy Class 12 Solutions Chapter 10 Redemption of Debentures are part of TS Grewal Accountancy Class 12 Solutions. Here we have given TS Grewal Accountancy Class 12 Solutions Chapter 10 Redemption of Debentures.

Question 1.
A public limited company is a manufacturer of chemical fertilisers. Its annual turnover is ₹ 50 crores. The company had issued 5,000, 12% Debentures of ₹ 500 each at par. Calculate the amount of Debentures Redemption Reserve which needs to be created to meet the requirements of law.
Solution:

Question 2.
Z Ltd. had issued following debentures:
(a) 1,00,000, 10% fully convertible debentures of ₹ 100 each on 1st April, 2016 redeemable by conversion after 5 years.
(b) 20,000, 10% Debentures of ₹ 100 each redeemable after 4 years, 25% Debentures in Cash and 75% by conversion.
State the amount of DRR required to be created as per the Companies Act,2013.
Solution:

Question 3.
Dow Ltd. issued ₹ 2,00,000; 8% Debentures of ₹ 10 each at a premium of 8% on 30th June, 2016 redeemable on 31st March, 2018. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures?
Solution:

Question 4.
Nirbhai Chemicals Ltd.issued ₹ 10,00,000; 6% Debentures of ₹ 50 each at a premium of 8% on 30th June, 2017 redeemable on 30th June, 2018. The issue was fully subscribed. Pass journal entries for issue and redemption of debentures. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures? Also, state how much amount should be invested in specified securities ?
Solution:

Question 5.
Export-Import Bank of India (EXIM Bank) issued 20,000, 10% Debentures of ₹ 100 each through public issue and 10,000, 10% Debentures of ₹ 100 each through private placement. State the amount of investment to be made by EXIM Bank before redemption of debentures.
Solution:

Question 6.
SRCC Ltd. has issued on 1st April, 2016, 20,000, 12% Debentures of ₹ 100 each redeemable by draw of lots as under:
During the year ended on 31st March, 2017 – 15 %
During the year ended on 31st March, 2018 – 25 %
During the year ended on 31st March, 2019 – 15 %
During the year ended on 31st March, 2020 – 25 %
During the year ended on 31st March, 2021 – 20 %
How much minimum investment or deposit should be made by SRCC Ltd. as per Companies Act, 2013 before redemption of debentures? When should it be made ?
Solution:

Question 7.
IFCI Ltd.(An All India Financial Institution) issued 10,00,000; 9% Debentures of SRCC Ltd. ₹ 50 each on 1st April, 2011 redeemable on 1st April, 2017. How much amount of Debentures Redemption Reserve is required before the redemption of debentures ? Also,pass journal entries for issue and redemption of debentures.
Solution:

Question 8.
On 31st March, 2003, G Ltd. had ₹ 8,00,000; 9% Debentures due for redemption. The company had a balance of ₹ 1,40,000 in its Debentures Redemption Reserve. Pass necessary journal entries for redemption of debentures.
Solution:

Question 9.
On 31st March, 2016, W Ltd. had the following balances in its books:
9% Debentures – ₹ 6,00,000
Debentures Redemption Reserve – ₹ 50,000
Surplus, i.e. Balance in Statement of Profit and Loss – ₹ 3,00,000
On that date, the company decided to transfer ₹ 1,00,000 to Debentures Redemption Reserve. It also decided to redeem debentures of ₹ 3,00,000 on 30th June, 2016.
Pass necessary journal entries in the books of the company.
Solution:

Question 10.
A Ltd. has credit balance of ₹ 1,26,000 in Surplus, i.e., Balance in Statement of Profit and Loss. Instead of declaring dividend it is resolved to utilize the profits to redeem its ₹ 1,20,000 Debentures redeemable at a premium of 5%.
Pass necessary journal entries in the books of the company.
Solution:

Question 11.
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.
Solution:

Question 12.
India Textiles Corporation Ltd. has outstanding ₹ 50,00,000; 9% Debentures of ₹ 100 each due for redemption on 31st July, 2017. Pass journal entries for redemption assuming that there is a balance of ₹ 3,00,000 in Debentures Redemption Reserve on the date of redemption.
Solution:

Question 13.
Manish Ltd.issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2016. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2018. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2017 and ₹ 10,00,000 on 31st March, 2018.
Pass journal entries regarding the issue and redemption of debentures, DRR and investment without providing for the interest or loss on issue of debentures.
Solution:

Question 14.
Godrej Ltd. has 20,000; 7% Debentures of ₹ 100 each due for redemption on 31st August, 2017. There is a balance of ₹ 3,50,000 in Debentures Redemption Reserve Account as on 31st March,2015. Investment, as required by the Companies Act, 2013 is made on 1st April, 2016 in fixed deposit bearing interest @ 6 % p.a. Bank deducted TDS @ 10 % on its maturity which is 31st March, 2017.
Pass journal entries for redemption of debentures.
Solution:

Question 15.
Apollo Ltd. issued 21,000; 8% Debentures of ₹ 100 each on 1st April, 2011 redeemable at a premium of 8% on 30th June, 2017. The company decided to transfer the required amount to Debentures Redemption Reserve in three equal annual installments starting with 31st March, 2015. Required investment was made in Government Securities on 30th April, 2017. Ignore interest on debentures and also investment.
Pass necessary journal entries regarding issue transfer to DRR, investment, and redemption of debentures.
Solution:

Question 16.
JB Ltd. issued ₹ 10,00,000; 6% Debentures at a premium of 4% redeemable at a premium of 5% after four years. The debentures were issued on 1st April,2014. Pass journal entries at the time of issue and redemption of debentures assuming that all legal requirements were complied.
Solution:

Question 17.
On 1st April, 2014, following were the balances of Blue Bird Ltd.
10% Debentures (redeemable on 30th September, 2017) – ₹ 15,00,000
Debentures Redemption Reserve – ₹ 2,00,000
The company met the requirements of the Companies Act, 2013 regarding Debentures Redemption Reserve and Investment and redeemed the debentures.
Pass necessary journal entries for the above transactions in the books of the company.
Solution:

Question 18.
Mahima Ltd.issued ₹ 38,00,000, 9% Debentures of ₹ 100 each on 1st April, 2013. The debentures were redeemable at a premium of 5% on 30th June, 2015. The company transferred an amount of ₹ 9,50,000 to Debentures Redemption Reserve on 31st March, 2015. Investments as required by law were made in fixed deposit of a bank on 1st April, 2015.
Ignoring interest on fixed deposit, pass necessary journal entries starting from 31st March, 2015 regarding redemption of debentures.
Solution:

Question 19.
On 1st April, 2013 the following balances appeared in the books of Blue and Green Ltd.:
12 % Debentures (Redeemable on 31st August, 2015) – ₹ 20,00,000
Debentures Redemption Reserve – ₹ 2,00,000.
The company met the requirements of Companies Act, 2013 regarding Debentures Redemption Reserve and Debentures Redemption Investments and redeemed the debentures.
Ignoring interest on investments, pass necessary journal entries for the above transactions in the books of company.
Solution:

Question 20.
Rich sugar Ltd. issued ₹ 20 Lakh, 8% Debentures divided into debentures of ₹ 100 each on 1st April, 2013, redeemable in four equal annual installments starting from 31st March, 2016. The company decided to transfer to Debentures Redemption Reserve ₹ 2,50,000 each year on 31st March, 2014 and 2015.
The company invested ₹ 3,00,000 in Government securities as required by the Companies Act, 2013.
Pass necessary journal entries for the above transactions.
Solution:

Question 21.
Hp Ltd. has 1,00,000; 8% Debentures of ₹ 50 each due for redemption in five equal annual installments starting from 30th June, 2015. Debentures Redemption Reserve has a balnce of ₹ 5,00,000 on that date. Pass journal entries.
Solution:

Question 22.
Venus Ltd. had 9,000, 9% Debentures of ₹ 100 each due for redemption. These debentures are to be redeemed in 3 equal installments (starting from 31st March,2015) at a premium of 10%. The company had a balance of ₹ 25,000 in the Debentures Redemption Reserve.
Pass necessary entries for redemption of debentures assuming that company transfer the balance of DRR to General Reserve after redeeming all the debentures.
Solution:

Question 23.
Shakti Enterprises Ltd. issued 30,000; 8% Debentures of ₹ 100 each on 1st October, 2014 redeemable in five equal annual installments starting with 31st March, 2018. The Board decides to transfer to Debentures Redemption Reserve ₹ 50,000 and ₹ 4,00,000 on 31st March 2015 and 2016 respectively and balance required to be transferred to Debentures Redemption Reserve on 31st March, 2017. Pass journal entries.
Solution:

Question 24.
Tata Motors Ltd. issued 40,000; 7% Debentures of ₹ 100 each on 1st July, 2009 redeemable at premium of 5% as under:
On 31st March, 2015 – 16,000 Debentures
On 31st March, 2016 – 16,000 Debentures
On 31st March, 2017 – 8,000 Debentures
It was decided to transfer amount out of profit to Debentures Redemption Reserve ₹ 2,00,000 on 31st March, 2012; ₹ 4,00,000 on 31st March, 2013 and balance on 31st March, 2014. It invested the required amount in terms of the Companies Act, 2013 in Government Securities and decided to realise them after last redemption. Paas journal entries ignoring interest.
Solution:

Question 25.
Ananya Ltd. had an authorised capital of ₹ 10,00,00,000 divided into 10,00,000 equity shares of ₹ 100 each. The company had already issued 2,00,000 shares. The dividend paid per share for the year ended 31st March,2007 was ₹ 30. The management decided to export its products to African countries. To meet the requirements of additional funds, the finance manager put up the following three alternate proposals before the Board of Directors:
(a) Issue 47, 500 equity shares at a premium of ₹ 100 per share.
(b) Obtain a long-term loan from bank which was available at 12% per annum.
(c) Issue 9% Debentures at a discount of 5%.
After evaluating these alternatives, the company decided to issue 1,00,000, 9% Debentures on 1st April, 2008. The face value of each debentures was ₹ 100. These debentures were redeemable in four installments starting from the end of third year, which were as follows:

Prepare 9% Debenture Account form 1st April, 2008 till all the debentures were redeemed.
Solution:

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