Entries in Redemption of Debenture ( in case of open market transactions)
Bhaskara Mv (1 Points)
26 March 2019Entries in Redemption of Debenture ( in case of open market transactions)
prasad Nilugal
( GST Practitioner & Accounts )
(14644 Points)
Replied 27 March 2019
Debenture are redeemed by way creating Debenture Redemption Reserve after 3 years . Entries in the Books of company
1) Bank A/c Dr
To Debenture A/c Cr
( Being issue of debentures and received amount )
2) Profit & Loss Appropriation A/c Dr
To Debenture Redemption Reserve A/c Cr
( Amount appropriated out profit for DRR 1st year )
3) Profit & Loss Appropriation A/c Dr
To Debenture Redemption Reserve A/c Cr
( Amount appropriated out of profit for DRR)
In the year of redemption
4) Debenture A/c Dr
To Debenture holder A/c Cr
( being amount payable to Debenture holders after redemption )
5) Debenture Holder A/c Dr
To Bank A/c Cr
(Payment after redemption )
6) Debenture Redemption Reserve A/c Dr
To General Reserve A/c Cr
( Being transfer to General reserve )
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