Page 189 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Accounting for Companies-I

Notes 2. At the end of second and subsequent years, ascertaining last year in which redemption is
to be made.
(a) When amount of interest on Debenture Redemption Fund Investment made in the
previous year is received—
Bank Account Dr.
To Interest on Debenture Redemption Fund Investment Account.

(b) When the interest on Debenture Redemption Fund Investment is transferred to
Debenture Redemption Fund Account—
Interest on Debenture Redemption Fund Investment Account Dr.

To Debenture Redemption Fund Account.
For Entries (a) & (b); the following one combined entry can be passed:
Bank Account Dr.
To Debenture Redemption Fund Account.

(c) When a fixed annual instalment is set aside from profits—
Profit and Loss Appropriation Account Dr.
To Debenture Redemption Fund Account.
(d) When the amount set aside from profit is invested—

Debenture Redemption Fund Investments Account Dr.
To Bank Account
3. At the end of last year – (when the debentures are to be redeemed)
(a) When the amount of interest on all previous debentures redemption reserve fund
investments is received—
Bank Account Dr.
To Interest on Debenture Redemption Fund Investment Account.

(b) When the interest on debenture redemption fund investments is transferred to
debenture redemption fund account—
Interest on Debenture Redemption Fund Investment Account Dr.

To Debenture Redemption Fund Account
(c) When a fixed annual instalment is set aside from profits—
Profit and Loss Appropriation Account Dr.
To Debenture Redemption Fund Account

(d) When the proceeds from the sale of all investments at profit is received—
Bank account Dr.
To Debenture Redemption Fund Investment Account
To Debenture Redemption Fund Account

(profit on sale of investment)

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