Question

Y.Ltd. redeemed 4,800, 12% debentures of Rs.100 each which were issued at par, at 110 per cent by converting them into equity shares of Rs.10 each issued at a discount of 4%. Journalise.

Answer 1

Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
	12% Debentures A/c		Dr.		4,80,000
	Premium on Redemption of Debenture A/c		Dr.		48,000
	To Debenture Holders A/c					5,28,000
	(Amount of debentures due to Debenture Holders)
	Debenture Holders A/c		Dr.		5,28,000
	Discount on Issue of Shares A/c		Dr.		22,000
	To Equity Share Capital A/c					5,50,000
	(Equity shares issued to Debenture Holders in lieu of debentures)