Question

On 1st april 2014 a company had 1000 12 % debentures of 100 Rs On 1st october 2014 the company purchased​ 300 own debentures at 93Rs for immediate cancellations Interest on debentures is payable half yearly on 30th september and 31st march Pass journal entries on 1st october and 31st march

Answer 1

Dear Student

Journal in the books of Company
Date	Particulars		Debit	Credit
01-10-14	12% Debentures (300 x 100)	Dr.	30,000
	To Bank (300 x 93)			27,900
	To Profit on Cancellation of Debentures			2,100
	(Being 300 debentures purchased for immediate cancellation)
31-03-15	Debenture Interest A/c (700 x 100) x 12%	Dr.	8,400
	To Debenture Holders A/c			8,400
	(Being Debenture interest on remaining debentures due)
	Debenture Holders A/c	Dr.	8,400
	To Bank A/c			8,400
	(Being Interest on remaining 700 debentures paid)
	Profit on Cancellation of Debenture A/c	Dr.	2,100
	To Capital Reserve			2,100
	(Being Profit on redemption transferred to capital reserve)

Regards