Published On Feb 10, 2018
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Question-53:
1st April 2011, ABC Ltd. issued Rs.1,00,000; 10% Debentures of Rs.100 each redeemable after 4 years. For this purpose a Sinking Fund was established. The investments were expected to earn 5% net per annum. Sinking Fund Table shows that Re. 0.232013 invested annually at 5% amounts to Re.1 in 4 years. Sinking Fund Investments were realised at Rs.75,000 on 31st March, 2015 and the bank balance before receipt of interest was Rs.35,000. Give journal entries to deal with the redemption.
đ´ Explained the Concept, need and procedure to create 'Sinking Fund' or 'Debenture Redemption Fund' with the help of a question details of which is mentioned above in the description.
Students can also watch following lectures for other topics related with the same chapter :
1. Interest on Debentures and TDS -
   â˘Â Interest on Debentures and TDS (Tax D... Â
2. Purchase of own Debentures in Open Market -
   â˘Â Purchase  of own debentures in open m... Â
3. Issue of Debentures as collateral Security -
   â˘Â Issue of Debentures as Collateral Sec... Â
4. Debenture Redemption Reserve and Debenture Redemption Investment -
   â˘Â Debenture Redemption Reserve (DRR) an... Â
5. Writting off Discount / Loss on Issue of Debentures -
   â˘Â Writting off Discount / Loss / Expens... Â
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