The following balances appeared in the books of Bright Ltd. as on 1st April, 2013: (a) Sinking fund account ₹50,000 (b) Sinking fund investment account ₹48,000 (10% government securities, nominal value ₹45,000) (c) 12% D

12% Debentures Account Date Particulars Amount ₹ Date Particulars Amount ₹ 01.04.2013 To Debenture Holders A/c 30,000 01.04.2013 By Balance b/d 1,00,000 To Balance c/d 70,000 1,00,000 1,00,000 By Balance b/d 70,000 Sinking Fund Account Date Particulars Amount ₹ Date Particulars Amount ₹ 01.04.2013 To Premium on redemption of debenture A/c 3,000 01.04.2013 By Balance b/d 50,000 To General reserve A/c 30,000 By Sinking Fund Investment A/c (W.N.1) 1,000 To Balance c/d 18,000 51,000 51,000 Sinking Fund Investment Account Date Particulars Amount ₹ Date Particulars Amount ₹ 01.04.2013 To balance b/d 48,000 01.04.2013 By Bank 33,000 To Sinking Fund A/c 1,000 By Balance c/d 16,000 49,000 49,000 Debenture Holders Account Date Particulars Amount ₹ Date Particulars Amount ₹ 01.04.2013 To Bank A/c 33,000 01.04.2013 By 12% Debentures A/c 30,000 By Premium on Redemption of Debentures A/c 3,000 33,000 33,000 Working Note: Profit on Sale of Investments Sales Proceeds of Investments (30,000 x 110%) = ₹33,000 Less: Cost of Investment (48,000/45,000 x 30,000) = ₹32,000 Profit on Sale = ₹1,000