S Ltd. issued 5,000, 14% debentures of ₹ 100 each on 1st April, 2016 at a discount of 5% repayable at a premium of 10% after 5 years out of the profits of the company. On 1st April, 2021, balance in the Debenture Redempt

Journal Entries Date Particular Dr. (₹) Cr. (₹) 01.04.2016 Bank A/c Loss on Issue of Debentures A/c To 14% Debentures A/c To Premium on Redemption of Debentures A/c (Allotment of 10,000, 14% debentures of ₹100 each issued at a discount of 5% and redeemable at a premium of 10% as per the Board resolution dated...) 4,75,000 75,000 5,00,000 50,000 01.04.2021 14% Debentures A/c Premium on Red. of Debentures A/c To Debenture holders A/c (Being the amount due on redemption) 5,00,000 50,000 5,50,000 01.04.2021 Profit and Loss Appropriation A/c To Debenture Redemption Reserve A/c (Being the transfer of profit to debenture redemption reserve account as required under SEBI guidelines) 80,000 80,000 01.04.2021 Debenture holders A/c To Bank A/c (Being the amount paid to debenture holders) 5,50,000 5,50,000 01.04.2021 Profit and Loss Appropriation A/c To General Reserve (Being the transfer of profit to the extent of 50% of the face value of debentures redeemed) 2,50,000 2,50,000 01.04.2021 Debenture Redemption Reserve A/c To General Reserve A/c (Being the transfer of balance in debenture redemption reserve account to General reserves on redemption of debentures) 2,50,000 2,50,000 Note: Loss on issue of Debentures Account has to be written off by the company over the period of 5 years preferably at the rate of (₹75,000 x 1/5) = ₹15,000 per year.