Sarthaks Test
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Hp Ltd. has 1,00,000; 8% Debentures of Rs. 50 each due for redemption in five equal annual installments starting from 30th June, 2015. Debentures Redemption Reserve has a balnce of Rs.5,00,000 on that date. Pass journal entries.

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As per circular no.04/2015 issued by ministry of corporate affairs every company in required to create maintain DRR Shall on or before year, deposit or invest, as the case may be a sum which shall not be less fifteen percent of the amount of its debentures maturing during day of March next following year. Accordingly, entry for in investment in Government securities has been passed a year before first redemption,Also, it has been assumed that investments will be enchased debenture are redeemed.

Note:

Interest on Debentures has been ignored as the question was However, the students's may pass the following entries given below for their reference.

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