1.

2.

Secom limited issued Rs. 150000 10% debentures on which interest is payable half-yearly on 31st march and 30 th September. The company has powers to purchase its debentures in the open market for cancellation thereof. The following purchase were made during the year ended 31st December, 2002 and the cancellations were made on he following 31 st march: 1st march Rs.25000 nominal purchased for Rs. 24725 ex-interest. 1st September-Rs.20000 nominal purchased for Rs..20125 cum-interests. You are required to draw up the following accounts up to the date of cancellation: I. debentures Account; ii. Own debentures investment account; and iii. Debenture interest account. Ignore taxation and make calculations to the nearest rupee. Mukund limited issued Rs. 1200000 debentures during 1987 on the following terms and conditions: a. A sinking fund account to be created with the help of yearly appropriations of profits and similar amount should be invested in giltedged securities. b. The company will have the right to purchase for cancellation debentures from the market if available below par value. c. The debentures should be redeemed on December 31,2002 at a premium of 2 percent On january1, 20002 the sinking fund account had a balance of Rs.886500 while sinking fund investments account also showed a similar amount. Debentures account showed a balance of Rs. 900000. The following transactions took place during 2002: On 1st july,2002 Rs.60000 debentures were purchased for Rs.53328 and cancelled immediately the amount being provided out of sale proceeds of investments of the book value of Rs. 69000 made at Rs.67800; ii. Income from sinking fund investments Rs. 44400 received on 1 st july, 2002 was not invested; iii. On 29th December, 2002, Rs,846000 was received on the sale of remaining sinking fund investments; iv. On 31st December, 20002 the remaining debentures were redeemed. Show the debenture account, sinking fund account sinking fund investment account and debenture redemption account for the year ended 31st December 20002. a. swati associates ltd has issued 10000 12%debentures of Rs.100 each on 1-1-1991. These debentures are redeemable after 3 years at a premium of Rs.5 per debenture. Interest is payable annually. b. on October 1, 1992 it buys 1500 debentures from the market at Rs.98 per debenture. These are sold away on June 30, 1993 at Rs. 105 per debenture. c. on January 1st 1993, it buys 1000 debentures at Rs. 104 per debenture from the open market. These are cancelled on April 1 st 1993. d. on October 1, 1993, it buys 2000 debentures at Rs. 106 per debenture from the open market. These debentures along with other debentures are redeemed on 31st December, 1993. All transactions are ex-interest. Prepare relevant ledger account. Prospectus ltd. Issued Rs.1000000, 6% debenture stock at par on 21-1-1997. Interest was payable on 30th June and 31st December, in each year. Under the terms of the debentures trust the owned stock is redeemable at par. The trust deed obliges the company to pay to the trustees on 31st December, 2000 and annually thereafter the sum of Rs. 100000 to be utilised for the redemption and cancellation of an equalent amount of stock which is to be selected by drawing lots. Alternatively the company is empower as from 1 st January 2000 to purchse it own debenture in the open market. These debentures must be surrendered to the trustees for cancellation and any adjustments for accrued interest recorded in the books of account. If in any year the nominal amount of the alternative does not amount to Rs. 100000 then the short fall is to be paid by the company to the trustees in cash on 31st December. The following purchases of stock were made by the company i.
particulars 30th September 2000 31st may 2001 31st july 2002 Nominal value of stock purchased 120000 75000 115000 Purchase price per Rs.100 of stock 98(cum interest) 95(ex interest) 92(cum interest)

3.

4.

The company fulfilled all its obligations under the trust deed. Prepare the a. debentures stock account b. debenture redemption account. C.debenture interest account ignore cost and taxation.

5.

Indebted ltd issued 10% debentures at par for Rs.800000 on 1st January 1984 interest was payable half-yearly on 30th June and 31st December every year. Under the terms of the trust deed, debentures are redeemable at par (after 3 years of issue) by the company purchasing them in open market and cancelling them with a minimum redemption of Rs. 80000 every year. In case, there was a short fall in redemption by the company by open operations, the short fall would be made by the company by payment on the last day of accounting year to the trustees who would draw last and redeem the debentures The company purchased its own debenture for cancellation as under: a. 30th September 1987 Rs.100000 at Rs. 98 cum interest b. 31st may 1988 Rs. 60000 at Rs.95 ex interest c. 31st july 1989 Rs.90000 at Rs. 96 cum interest The company carried out its obligations under the deed prepare the following ledger accounts for calendar years 1987,1988 and 1989. i. Debentures account, ii. Debentures redemption account and debentures interest account ignore taxation.