Page 5 - LN REDEMPTION OF DEB

05.On redemption of Debentures:

Debentureholders A/C Dr.
To Bank a/c

6. On transfer of Debenture Redemption Reserve to General Reserve

a/c

Debenture Redemption Reserve a/c Dr.
To General Reserve a/c

Instalment Method

This is also known as the drawing of lots method. Here the Company will

start redeeming debentures in lots or installments from one particular year

as agreed by the terms of issue

Journal Entries on redemption of Debentures:

05. On transfer of Profit to Debenture Redemption Reserve:
Surplus , Balance in statement of Profit & loss a/c Dr.

To Debenture Redemption Reserve A/c

06. On Investment or Making Deposit in the Specified Securities :

Debenture Redemption Investment A/c
To Bank A/c

07. On Encashment of Investment :

Bank a/c dr.
To Debenture Redemption Investment A/c

To Interest Earned A/c