Debentures

 

 

please help me in this question

 

On 1st April, 2005 Appolo Ltd. issued 2,000, 12% Debentures of Rs. 100 each repayable

at par at the end of three years. It has been decided to set up a ‘Sinking Fund’ for the

purpose of their redemption. The investments are expected to earn interest of

4% p.a. The Sinking Fund Table shows that Re. 0.320348 invested each year

amounts to Re 1 @ 4% p.a. in three years.

Investments were sold at par on 31st March, 2008 and the debentures were paid off.

Pass journal entries and prepare necessary accounts. Entries relating to interest on

debentures may be ignored.

i need an answer for this please its urgent

thanks

Replies (1)

Annual Instalment 200000 * 0.320348 = Rs. 64070/-

 

01.04.2005

Bank A/c Dr. 200000

To 12% Debentures A/c 200000

 

P & L Appropriation A/c Dr. 64070

To Sinking fund Reserve A/c 64070

 

Sinking Fund Investment A/c Dr. 64070

To Bank A/c 64070

 

01.04.2006

Bank A/c Dr. 2563

To Interest on sinking fund investment a/c 2563

 

Int. on SFI A/c Dr. 2563

To Sinking Fund Reserver A/c 2563

 

P & L Appropriation A/c Dr. 64070

To Sinking fund Reserve A/c 64070

 

Sinking Fund Investment A/c Dr. 64070 + 2563

To Bank A/c 64070 + 2563

 

01.04.2007

Bank A/c Dr. 2665

To Interest on sinking fund investment a/c 2665

 

Int. on SFI A/c Dr. 2665

To Sinking Fund Reserve A/c 2665

 

P & L Appropriation A/c Dr. 64070

To Sinking fund Reserve A/c 64070

 

Sinking Fund Investment A/c Dr. 64070 + 2563 + 2665

To Bank A/c 64070 + 2563 + 2665

 

31.03.2008

Interest on sinking fund investments a/c Dr. 2772

To Sinking Fund Reserve A/c 2772

 

Bank A/c Dr. 200210

To Sinking Fund Investments A/c 200210

 

Sinking Fund Investments A/c 210

To Sinking Fund Reserve A/c 210

 

Sinking Fund Reserve A/c 200210

To General Reserve A/c 200210

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
ARTICLESHIP 07 October 2026
Article assistant

S.K.Bajpai & Co.

Noida

B.Com

View Details
Company
ARTICLESHIP 17 October 2026
Articled Assistant

RRPM & Associates LLP

Chennai

CA Inter

View Details
Company
12 October 2026
AUDIT , ACCOUNTS AND TAXATION

KDSS

New Delhi

B.Com

View Details
Company
ARTICLESHIP 07 October 2026
Article Assistant

Malhotra Rajesh & Associates

New Delhi

B.Com

View Details
Company
ARTICLESHIP 28 September 2026
Junior Accountant

J S P M & Associates LLP

Pune

B.Com

View Details
Company
30 September 2026
Senior Accountant

Codeboard Technology

Chennai

B.Com

View Details
Company
ARTICLESHIP 21 September 2026
CA Article Assistant

KK & Company Chartered Accountant

Pune

CA Inter

View Details
Company
08 October 2026
Account Executive

Elite Taxation

New Delhi

CA Foundation

View Details