Entry for own debentures sold

A/c entries 3117 views 4 replies

Could anyone please tell the entry for below transaction?

(iii)Own debentures of Rs. 80,000 were sold at Rs. 98 cum-interest and remaining own debentures were cancelled.

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Replies (4)

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Coupon+face value- market prine now/face value gives the yield of profit

Coupon+market price - face value/face value gives the loss on yield.

I am considering that your investing in debentures. 

Debentures are usually a liability and and measured at amortised cost. If you have sold your debt which no one does, it's a complex treatment but solution exists.

So are your trading or into debt.

If your trading

Dr. Bank

Cr. Gain

Cr. Investment account. 

 

I'm also not aware of debt could be sold. Can it be like securitied like mortgages

 

Thisa biggest mistake in MBA formula called holding period return. No one knows the true gain in this this because it's calculated the same for ten years as well.

 

If your investment is indexed based on carrying amount, it's safer. So did you buy debentures like gave a loan and sold it off to someone else? Or fvpl investment.

Entry for Investment Sold

Bank a/c (800*98) Dr  78,400 

        To Investment in Own debentures a/c (800*96)   76,800 

         To Capital Reduction a/c                                       1,600

Entry for Cancellation of debentures

12% Debentures a/c Dr 1,20,000

        To Investment in Own debentures a/c   1,15,200

         To Capital Reduction a/c                           4,800


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